UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
| ☐ |
Preliminary
Proxy Statement |
| ☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ |
Definitive
Proxy Statement |
| ☐ |
Definitive
Additional Materials |
| ☐ |
Soliciting
Material Pursuant to §240.14a-11(c) or §240.14a-2 |
MDB
CAPITAL HOLDINGS, LLC
(Name
of Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
| ☒ |
No
fee required. |
| ☐ |
Fee
paid previously with preliminary materials. |
| ☐ |
Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
MDB
CAPITAL HOLDINGS, LLC
14135
Midway Road, Suite G150
Addison,
Texas 75001
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
Be Held at 1:00 p.m. Eastern Time on December 10, 2024
Dear
Shareholders:
We
cordially invite you to attend the 2024 annual meeting of shareholders (the “Annual Meeting”) of MDB Capital Holdings, LLC,
a Delaware limited liability company, which will be held on December 10, 2024 at 1:00 p.m. Eastern Time. The Annual Meeting will
be held as a virtual meeting, which will be conducted via live webcast. In order to attend the Annual Meeting, you must register in advance
at www.virtualshareholdermeeting.com/MDBH2024 prior to the deadline of 11:59 pm Eastern Time, December 9, 2024. After completing the
registration, you will receive a confirmation email, which will include information about when you should expect to receive a unique
link to gain access to the Annual Meeting. You will not be able to attend the meeting in person. The meeting will be held for the following
purposes, as more fully described in the accompanying proxy statement (the “Proxy Statement”):
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1. |
To
elect the eight nominees to serve as directors until the 2025 annual meeting of shareholders and until their successors are duly
elected and qualified; |
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2. |
To
consider and vote on a non-binding advisory resolution to approve the compensation paid to our named executive officers for our 2025
fiscal year (commonly known as “say-on-pay”); |
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3. |
To
consider and vote on a non-binding advisory determination of the frequency of future advisory votes on the compensation paid to our
named executive officers (commonly known as “say-on-frequency”); |
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4. |
To
ratify the appointment of RBSM LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2024;
and |
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5. |
To
transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
Our
board of directors has fixed the close of business on October 11, 2024 as the record date for the Annual Meeting. Only shareholders of
our Class A and Class B shares of record on October 11, 2024 are entitled to notice of and to vote at the Annual Meeting. Further information
regarding voting rights and the matters to be voted upon is presented in the accompanying Proxy Statement.
On
or about October 28, 2024, we expect to mail the Notice of Internet Availability of Proxy Materials (the “Notice”)
to our shareholders. The Notice will contain instructions on how to access our Proxy Statement and our annual report on Form 10-K. The
Notice provides instructions on how to vote via the internet or by telephone and includes instructions on how to receive a paper copy
of our proxy materials by mail. The accompanying Proxy Statement and our annual report on Form 10-K can be accessed directly at the following
internet address: www.proxyvote.com. All you have to do is enter the control number located on your Notice or proxy card.
YOUR
VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote promptly via the internet, telephone
or mail.
By
order of the board of directors,
Christopher
Marlett
Chief
Executive Officer
Addison,
Texas
October
28, 2024
TABLE
OF CONTENTS
MDB
CAPITAL HOLDINGS, LLC
PROXY
STATEMENT
FOR THE
2024
ANNUAL MEETING OF SHAREHOLDERS
To
Be Held at 1:00 p.m. Eastern Time on December 10, 2024
This
Proxy Statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors
(the “Board”) for use at the 2024 annual meeting of shareholders of MDB Capital Holdings, LLC, a Delaware limited liability
company, and any postponements, adjournments or continuations thereof (the “Annual Meeting”). The Annual Meeting will be
held on December 10, 2024 at 1:00 p.m. Eastern Time. The Annual Meeting will be held as a virtual meeting, which will be conducted via
live webcast. In order to attend the Annual Meeting, you must register in advance at www.virtualshareholdermeeting.com/MDBH2024 prior
to the deadline of 11:59 pm Eastern Time on December 9, 2024. After completing the registration, you will receive a confirmation email,
which will include information about when you should expect to receive a unique link to gain access to the Annual Meeting. You will not
be able to attend the meeting in person. Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions
on how to access this Proxy Statement and our annual report is first being mailed or available to shareholders on or about October 28,
2024 to all shareholders entitled to vote at the Annual Meeting.
The
information provided in the “question and answer” format below is for your convenience only and is merely a summary of the
information contained in this Proxy Statement. You should read this entire Proxy Statement carefully. Information contained on, or that
can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement and references to our
website address in this Proxy Statement are inactive textual references only.
All
references to “MDB,” “Company,” “we,” “our,” “us,” or similar terms refer
to MDB Capital Holdings, LLC and our direct, wholly and partially-owned subsidiaries.
What
matters am I voting on?
You
will be voting on the following proposals:
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To
elect the eight nominees to serve as directors until the 2025 annual meeting of shareholders and until their successors are duly
elected and qualified; |
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To
consider and vote on a non-binding advisory resolution to approve the compensation paid to our named executive officers for our 2025
fiscal year (commonly known as “say-on-pay”); |
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To
consider and vote on a non-binding advisory determination of the frequency of future advisory votes on the compensation paid to our
named executive officers (commonly known as “say-on-frequency”); and |
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To
ratify the appointment of RBSM LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2024; |
Additionally,
shareholders may be asked to transact any other business as may properly come before the Annual Meeting or any adjournment or postponement
thereof. As of the date of this Proxy Statement, we are not aware of any other matters that will be presented for consideration at the
Annual Meeting.
How
does the Board recommend I vote on these proposals?
Our
Board recommends a vote:
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“FOR”
the election of all of the nominees for directors. |
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“FOR”
the approval, on a non-binding advisory basis, of the compensation of our named executive officers. |
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“FOR”
the proposal, on an advisory basis, approving the frequency of “THREE YEARS” for holding future advisory votes
on executive compensation stockholders vote. |
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“FOR”
the ratification of the appointment of RBSM LLP as our independent registered public accounting firm for our fiscal year ending December
31, 2024. |
Who
is entitled to vote?
Holders
of our Class A and Class B shares, voting together as a single class, as of the close of business on October 11, 2024, the record date
for the Annual Meeting (the “Record Date”), will be entitled to notice of and to vote at the Annual Meeting.
Registered
Shareholders. If on the Record Date, our common shares are registered directly in your name with our transfer agent, you are considered
the shareholder of record with respect to those shares and the Notice was provided to you directly by us. As the shareholder of record,
you have the right to grant your voting proxy directly to the individuals listed on the proxy card or vote on your own behalf at the
Annual Meeting. Throughout this Proxy Statement, we refer to these registered shareholders as “shareholders of record.”
Street
Name Shareholders. If on the Record Date, our common shares are held on your behalf in a stock brokerage account, or by a bank, trustee
or other nominee, you are considered the beneficial owner of shares held in “street name,” and the Notice was forwarded to
you by your broker or nominee, who is considered the shareholder of record with respect to those shares. As the beneficial owner, you
have the right to direct your broker, bank or other nominee as to how to vote your shares and are also invited to attend the Annual Meeting.
However, since a beneficial owner is not the shareholder of record, you may not vote your shares on your own behalf at the Annual Meeting
unless you follow your broker or nominee’s procedures for obtaining a legal proxy. Your broker or nominee is obligated to provide
you with instructions to vote before the Annual Meeting or to obtain a legal proxy if you wish to vote on your own behalf at the Annual
Meeting. If your broker or nominee is participating in an online program that allows you to vote over the internet or by telephone, your
Notice or other voting instruction form will include that information. If what you receive from your broker or other nominee does not
contain internet or telephone voting information, please complete and return the paper form in the self-addressed, postage paid envelope
provided by your broker or nominee. Throughout this Proxy Statement, we refer to shareholders who hold their shares through a broker,
bank, trustee or other nominee as “street name shareholders.”
A
list of shareholders of record entitled to vote shall be available to any shareholder for any purpose relevant to the Annual Meeting
for 10 days prior to the Annual Meeting upon request to the Corporate Secretary. To obtain a copy, please send the request to MDB Capital
Holdings, LLC, Attention: Corporate Secretary, 14135 Midway Road, Suite G150, Addison, Texas 75001.
What
constitutes a quorum for the Annual Meeting?
A
quorum is required for shareholders to conduct business at the Annual Meeting. The presence, present by remote communication, or represented
by proxy, of the holders of one-third, or 3,098,543 shares, of the outstanding shares of our Class A and Class B shares, taken together,
is necessary to establish a quorum at this Annual Meeting. As of the close of business on the Record Date, there were an aggregate of
9,295,632 shares of our Class A and Class B shares outstanding. There are 4,295,632 Class A shares outstanding and 5,000,000 Class B
shares outstanding. Shares present, virtually or represented by proxy, including shares as to which authority to vote on any proposal
is withheld, shares abstaining as to any proposal and broker non-votes (where a broker submits a properly executed proxy but does not
have authority to vote a shareholder’s shares) on any proposal will be considered present at the meeting for purposes of establishing
a quorum.
How
is the vote counted?
Under
our operating agreement, any proposal other than an election of directors is decided by a majority of the votes properly cast for and
against such proposal, except where a larger vote is required by law or our operating agreement. Abstentions and broker “non-votes”
are not included in the tabulation of the voting results on any such proposal and, therefore, do not have an impact on such proposals.
A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because
the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial
owner.
If
your shares are held in “street name” by a broker, bank or other nominee, your broker, bank or other nominee is required
to vote your shares according to your instructions. If you do not give instructions to your broker, bank or other nominee, the broker,
bank or other nominee will still be able to vote your shares with respect to certain “routine” items, but will not be allowed
to vote your shares with respect to “non-discretionary” items. Proposals No. 1, 2 and 3, are “non-routine” items.
If you do not instruct your broker how to vote with respect to this proposal, your broker, bank or other nominee may not vote for this
proposal, and those votes will be counted as broker “non-votes.” Proposal No.4 is considered to be a “routine”
item, and your broker, bank or other nominee will be able to vote on this proposal even if it does not receive instructions from you.
Some brokers, banks and other nominees, however, are not exercising their right to vote on “routine” items, therefore
shareholders are encouraged to respond to the request for instructions to indicate to their brokers, banks and nominees as to how they
should vote the shares they hold for a shareholder.
How
many votes do I have?
In
deciding all matters at the Annual Meeting, each shareholder will be entitled to one vote for each share of our Class A shares and five
votes for each share of our Class B shares held by them on the Record Date. Shareholders are not permitted to cumulate votes with respect
to the election of directors. Therefore, on matters presented to the shareholders, the Class A shares have 4,295,632 votes and the
Class B shares have 25,000,000 votes, out of an aggregate of 29,295,632 votes.
How
many votes are needed to approve each proposal?
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Proposal
No. 1: The election of directors requires a plurality vote of the Class A and Class B shares, voting together as a single class,
present by remote communication or represented by proxy at the Annual Meeting and entitled to vote. “Plurality” means
that the nominees who receive the largest number of votes cast “FOR” are elected as directors. Any shares not voted “FOR”
a particular nominee (as a result of an abstention or a broker non-vote) will not be counted in such nominee’s favor and will
have no effect on the outcome of the election. You may vote “FOR” or “WITHHELD” on each of the nominees. |
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Proposal
No. 2: Approval of this proposal requires the affirmative vote of holders of a majority of the Class A and Class B shares, voting
together a single class, present by remote communication or represented by proxy at the Annual Meeting and entitled to vote. Abstentions
will have the effect of votes cast against the proposal. Broker non-votes will have no effect. However, because the vote is advisory
and non-binding, a negative vote will be noted but will not be determinative. |
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Proposal
No. 3: Because the vote is advisory and non-binding, if none of the frequency options receive a majority of the votes cast by
the Class A and Class B shares, voting together as a single class, the option receiving the greatest number of votes will be considered
the frequency recommended by the stockholders. Abstentions and broker non-votes will have no effect on the outcome of this proposal.
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Proposal
No. 4: The ratification of the appointment of RBSM LLP requires the affirmative vote of a majority of the Class A and Class B
shares, voting together as a single class, present by remote communication or represented by proxy at the Annual Meeting and entitled
to vote. “Majority” means the number of shares voted “FOR” Proposal No. 4 must exceed the number of votes
“AGAINST” Proposal No. 4. Abstentions and broker non-votes will have the effect of votes cast against the proposal. |
How
do I vote?
If
you are a shareholder of record, there are three ways to vote:
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By
Internet: You may submit a proxy over the internet by following the instructions at www.proxyvote.com, 24 hours a day, seven
days a week, until 11:59 p.m. Eastern Time on December 9, 2024, the day before the meeting (have your Notice or proxy card in hand
when you visit the website); |
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By
Toll-Free Telephone: You may submit a proxy by calling 1-800-690-6903 24 hours a day, seven days a week, until 11:59 p.m. Eastern
Time on December 9, 2024, the day before the meeting (have your Notice or proxy card in hand when you call); or |
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By
Mail: You may complete, sign and mail your proxy card (if you received printed proxy materials) which must be received by us
by 11:59 p.m. Eastern Time on December 9, 2024, the day before the meeting. |
If
you are a street name shareholder, you will receive voting instructions from your broker, bank or other nominee. You must follow the
voting instructions provided by your broker, bank trustee or other nominee in order to instruct your broker or other nominee on how to
vote your shares. Street name shareholders should generally be able to vote by returning an instruction card, by telephone or by internet.
However, the availability of telephone and internet voting will depend on the voting process of your broker or other nominee. As discussed
above, if you are a street name shareholder, you may not vote your shares on your own behalf at the Annual Meeting unless you obtain
a legal proxy from your broker, bank, trustee or other nominee.
Can
I change my vote after submitting my proxy?
Yes.
If you are a shareholder of record, you can change your vote or revoke your proxy any time before date of the Annual Meeting in any one
of the following ways:
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You
may enter a new vote by internet or by telephone until 11:59 p.m. Eastern Time on December 9, 2024, the day before the meeting; |
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You
may submit another properly completed proxy card by mail with a later date, which must be received by us by 11:59 p.m. Eastern Standard
Time on December 9, 2024, the day before the meeting; or |
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You
may send written notice that you are revoking your proxy to MDB Capital Holdings, LLC, Attention: Corporate Secretary, 14135 Midway
Road, Suite G150, Addison, Texas 75001, which must be received by us by 11:59 p.m. Eastern Standard Time on December 9, 2024, the
day before the meeting. |
If
you are a street name shareholder, your broker or nominee can provide you with instructions on how to change your vote.
What
is the effect of giving a proxy?
Proxies
are solicited by and on behalf of our Board. Our Board has designated Christopher Marlett and Mo Hayat as proxy holders, each of whom
is an officer of the Company. When proxies are properly dated, executed and returned, the shares represented by such proxies will be
voted at the Annual Meeting in accordance with the instructions of the shareholder. If no specific instructions are given, however, the
shares will be voted in accordance with the recommendations of our Board as described under “How does the Board recommend
I vote on these proposals?” above. If any matters not described in this Proxy Statement are properly presented at the Annual
Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned to a later
date, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions
before the new date, as described above.
How
can I participate in the virtual Annual Meeting?
There
is no physical location for the Annual Meeting. Shareholders of record as of the close of business on the Record Date are entitled to
participate virtually in the Annual Meeting, including to vote your shares online during the Annual Meeting and to ask questions during
the Annual Meeting by visiting www.virtualshareholdermeeting.com/MDBH2024. To participate and vote in the Annual Meeting, you will need
the control number included on your proxy card or voting instruction form.
We
are committed to ensuring, to the extent possible, that shareholders will be given the same participation rights that they would be given
if they attended an in-person meeting. We will endeavor to answer as many shareholder-submitted questions as time permits that comply
with the Annual Meeting rules of conduct. We reserve the right to edit profanity or other inappropriate language and to exclude questions
regarding topics that are not pertinent to meeting matters or Company business. If we receive substantially similar questions, we may
group such questions together and provide a single response to avoid repetition.
The
meeting webcast will begin promptly at 1:00 p.m. Eastern Time. Online check-in will begin at 12:45 p.m. Eastern Time, fifteen minutes
before the meeting, and we encourage you to allow ample time for check-in procedures. If you experience technical difficulties during
the check-in process or during the meeting, please call the technical support number provided on the log-in page of the virtual meeting.
Additional information regarding the rules and procedures for participating in the Annual Meeting will be set forth in our meeting rules
of conduct, which shareholders can view during the meeting at the meeting website. Regardless of whether you plan to participate in the
Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Accordingly, we encourage you to vote
in advance of the Annual Meeting. Please be aware that participating in the Annual Meeting will not, by itself, revoke a proxy. See,
“Can I change my vote after submitting my proxy?” above for more details.
How
do I submit questions during the meeting?
Shareholders
may submit questions during the Annual Meeting by visiting www.proxyvote.com and using their 16-digit control number to enter the meeting.
Questions may be submitted by typing them into the text box provided.
Why
did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?
In
accordance with the rules of the Securities and Exchange Commission (the “SEC”), we have elected to furnish our proxy materials,
including this Proxy Statement and our annual report, primarily via the internet. The Notice containing instructions on how to access
our proxy materials is first being mailed on or about October 28, 2024, to all shareholders entitled to vote at the Annual Meeting.
Shareholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions
contained in the Notice. We encourage shareholders to take advantage of the availability of our proxy materials on the internet to help
reduce the environmental impact of our Annual Meeting.
How
are proxies solicited for the Annual Meeting and who will bear the cost of this solicitation?
Our
Board is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will
reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker or other
nominee holds shares of our common shares on your behalf. In addition, our directors and employees may also solicit proxies by telephone
or by personal or other means of communication. Our directors and employees will not be paid any additional compensation for soliciting
proxies.
How
may my brokerage firm or other nominee vote my shares if I fail to provide timely directions?
Brokerage
firms and other nominees, for example banks or agents, holding shares of our common shares in street name for their customers are generally
required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion
to vote your shares on Proposal No. 4, our sole “routine” matter, but brokers and nominees cannot use their discretion to
vote “uninstructed” shares with respect to matters that are considered “non-routine” under the rules of the New
York Stock Exchange (“NYSE”), even though we are a Nasdaq-listed company. “Non-routine” matters are matters that
may substantially affect the rights or privileges of shareholders, such as mergers, shareholder proposals, election of directors (even
if not contested), executive compensation (including any advisory shareholder vote on executive compensation) and certain corporate governance
proposals, even if these proposals are supported by management. Accordingly, your broker or nominee may not vote your shares on Proposals
No. 1, 2 and 3, without your instructions, but may vote your shares on Proposal No. 4.
Where
can I find the voting results of the Annual Meeting?
We
will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K
(“Form 8-K”) that we will file with the SEC within four business days after the Annual Meeting. If final voting results are
not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we will file a Form 8-K to publish
preliminary results and will provide the final results in an amendment to the Form 8-K as soon as they become available.
What
is the deadline for shareholders to propose actions for consideration at next year’s annual meeting of shareholders or to nominate
individuals to serve as directors?
Shareholder
Proposals
Shareholders
may present proper proposals for inclusion in our Proxy Statement and for consideration at the next annual meeting of shareholders by
submitting their proposals in writing in a timely manner. We plan to hold the 2025 annual meeting in June 2025. Therefore, for a shareholder
proposal to be considered for inclusion in our Proxy Statement for our 2025 annual meeting of shareholders, we must receive the written
proposal at our principal executive offices not later than March 1, 2025. In addition, shareholder proposals must comply with the requirements
of Rule 14a-8 regarding the inclusion of shareholder proposals in company-sponsored proxy materials. Shareholder proposals should be
addressed to:
MDB
Capital Holdings, LLC
Attention:
Secretary
14135
Midway Road, Suite G150
Addison,
Texas 75001
Our
operating agreement also establishes an advance notice procedure for shareholders who wish to present a proposal before an annual meeting
of shareholders. Our operating agreement provides that the only business that may be conducted at an annual meeting of shareholders is
business that is (i) specified in our proxy materials with respect to the meeting; (ii) otherwise properly brought before the meeting
by or at the direction of our Board; or (iii) properly brought before the meeting by a shareholder of record entitled to vote at the
annual meeting who has delivered timely written notice, which notice must contain the information specified in our amended and restated
bylaws. To be timely for our 2025 annual meeting of shareholders, we must receive the written notice at our principal executive offices:
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not
earlier than February 1, 2025 and |
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not
later than the close of business on March 1, 2025. |
In
the event that we hold our 2025 annual meeting of shareholders more than 30 days before or more than 60 days after the proposed June
2025 date for the Annual Meeting, notice of a shareholder proposal that is not intended to be included in our Proxy Statement must be
received no earlier than the close of business on the 120th day before our 2025 annual meeting of shareholders and no later than the
close of business on the later of the following two dates:
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the
90th day prior to our 2025 annual meeting of shareholders; or |
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the
10th day following the day on which public announcement of the date of our 2025 annual meeting of shareholders is first made. |
If
a shareholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present
his, her or its proposal at such annual meeting, such nomination shall be disregarded and such proposed business shall not be transacted,
notwithstanding that proxies in respect of such vote may have been received by the Company.
Nomination
of Director Candidates
You
may propose director candidates for consideration by our nominating and governance committee. Any such recommendations should include
the nominee’s name and qualifications for membership on our Board and should be directed to the address set forth above. For additional
information regarding shareholder recommendations for director candidates, see “Board of Directors and Corporate Governance—Shareholder
Recommendations for Nominations to the Board of Directors.”
In
addition, our operating agreement permits shareholders to nominate directors for election at an annual meeting of shareholders. To nominate
a director, the shareholder must provide the information required by our operating agreement and send timely notice in accordance with
our amended and restated bylaws, which, in general, require that the notice be received by us within the time periods described above
under “—Shareholder Proposals” for shareholder proposals that are not intended to be included in a Proxy Statement.
In addition to satisfying the foregoing requirements, to comply with the universal proxy rules in connection with our 2025 annual meeting
of shareholders, shareholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice
to the Company that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 1, 2025.
Availability
of Operating Agreement
Our
operating agreement is part of our public filings on the SEC’s website at www.sec.gov. You may also contact our principal executive
offices for a copy of the relevant provisions regarding the requirements for making shareholder proposals and nominating director candidates.
BOARD
OF DIRECTORS AND CORPORATE GOVERNANCE
Our
business affairs are managed under the direction of our Board, which is currently composed of eight members. Four of our current directors
are independent within the meaning of the listing standards of The Nasdaq Stock Market (“Nasdaq”).
Board
Leadership Structure
We
believe that all members of our Board should have a voice in the affairs and the management of the Company. Our Board does not have a
formal policy regarding the separation of the roles of Chief Executive Officer and Chairperson of the Board, as our Board believes that
it is in the best interests of the Company to make that determination based on the direction of the Company and the current membership
of the Board. The Board believes that our shareholders are best served at this time by having a Chairperson who is an integral part of
our Board structure and a critical aspect of effective corporate governance.
Christopher
Marlett has served as Chairman of our Board since inception on August 10, 2021. Our Board determined that having the Chief Executive
Officer serve as Chairman of the Board is in the best interest of our shareholders at this time because of the efficiencies achieved
in having the role of Chief Executive Officer and Chairman of the Board combined, and because the detailed knowledge of our day-to-day
operations and business that the Chief Executive Officer possesses greatly enhances the decision-making processes of our Board as a whole.
Mr. Marlett brings considerable skills and experience, as described below, to the role. As the Chairman of our Board, Mr. Marlett has
significant responsibilities, which are set forth in our operating agreement, and include, in part:
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Establishing
the agenda for regular meetings of our Board; |
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Coordinating
with the committee chairs regarding meeting agendas and information requirements and presiding over meetings of our Board; and |
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Coordinating
the activities of the other directors and performing such other duties as our Board may establish or delegate from time to time. |
In
addition, the Board appointed Susanne Meline as its Lead Independent Director on July 5, 2022, for the purpose acting as a liaison between
the independent and non-independent directors as well as chairing any meetings of the independent board members. The active involvement
of our independent directors, combined with the qualifications and significant responsibilities of our Chairman and other directors,
provides balance on our Board and promotes strong, independent oversight of our management and affairs.
Role
of the Board of Directors in Risk Oversight
One
of the key functions of our Board is informed oversight of our risk management process. Our Board does not anticipate having a standing
risk management committee, but rather anticipates administering this oversight function directly through our Board as a whole, as well
as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular,
our Board is responsible for monitoring and assessing strategic risk exposure, and our audit committee has the responsibility to consider
and discuss any major financial risk exposures and the steps our management will take to monitor and control such exposures, including
guidelines and policies to govern the process by which risk assessment and management is undertaken.
Our
audit committee is responsible for reviewing and discussing our major financial risk exposures and the steps our management has taken
to monitor and control these exposures, including guidelines and policies with respect to risk assessment and risk management. Our audit
committee monitors compliance with legal and regulatory requirements and is responsible for the oversight of cybersecurity risks
Family
Relationships
There
are no family relationships between our Board and any of our executive officers.
Controlled
Company; Director Independence
We
have two classes of common shares, the Class A and the Class B shares, which vote together on all matters put before the holders of common
shares. Each Class A share has one vote and each Class B share has five votes, and the Class B shares currently represent approximately
85% of the shares eligible to vote at the Annual Meeting. The Class B shares are held by two persons who have control over the operations
of the Company. Therefore, the Company is a controlled company under the Nasdaq listing rules and is exempt from certain listing requirements,
including having (i) a board comprised of a majority of independent directors, (ii) a compensation committee, and (iii) a director nominations
committee. Additionally, we are not required to hold annual meetings. Management intends to take advantage of these exemptions. Accordingly,
shareholders will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance
requirements of Nasdaq. Notwithstanding the exemption, currently we have a board that has several independent directors, we are required
to have and will have an audit committee, and related party transactions will have to be reviewed by the audit committee. Shareholder
approval will be required for stock options or purchase plans, and the financial statements must be audited by an independent public
accountant that is registered with the PCAOB.
Audit
committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Exchange Act, and the Nasdaq
listing standards. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under
the Exchange Act and the Nasdaq listing standards.
Our
Board has undertaken a review of the independence of each of our director nominees. Based on information provided by each director concerning
his or her background, employment and affiliations, our Board has determined that each member of our Board other than Christopher Marlett,
Anthony DiGiandomenico, Mo Hayat, and George Brandon qualifies as “independent” as defined under the applicable Nasdaq and
SEC rules.
Attendance
at Board Meetings and Committees
In
the fiscal year ended December 31, 2023 the Board held four meetings. The audit committee met four times in the fiscal year ended December
31, 2023 and also met four times in the fiscal year ending December 31, 2024 in connection with the filing of the financial statements
of the Company with the SEC. Each incumbent director attended at least 75% of the aggregate of (i) the total number of meetings of our
Board held during the period for which he has been a director, and (ii) the total number of meetings held by all committees of our Board
on which he served during the periods that he served.
Pursuant
to our corporate governance guidelines, we encourage, but do not require, directors to attend our annual meeting of shareholders.
Board
Attendance at Annual Stockholders’ Meeting
Our
policy is to invite and encourage each member of the Board of Directors to attend our annual meetings of stockholders.
Committees
of the Board of Directors
Because
our Class B shares are held by two persons and represents more than 50% voting control of MDB, we are a “controlled company”
under the listing rules of Nasdaq. As a controlled company, we are exempt from many of the corporate governance obligations that other
companies must follow when listed on Nasdaq. Management intends to take advantage of these exemptions as long as it is a controlled company.
As such, we will be exempt from the certain of the corporate governance rules under the Rule 5600 Series, as follows: (i) having a board
comprised of a majority of independent directors (Rule 5605(b)), iii) having a compensation committee (Rule 5605(d)), and (iii) having
a director nominations committee (Rule 5605(e)). Additionally, we are not required to hold annual meetings. Notwithstanding these exemptions,
we have an audit committee comprised solely of independent directors, which among other things reviews related party transactions. Also,
notwithstanding the exemptions, approval by the holders of Class A shares will be required for stock option or purchase plans, will be
required by SEC regulation to the extent we do issue a proxy statement for certain matters on which shareholders must be solicited, and
our financial statements must be audited by an independent public accountant that is registered with the PCAOB.
Audit
Committee
We
have established an audit committee. The audit committee is be responsible for, among other things: (i) retaining and overseeing our
independent accountants; (ii) assisting the board of directors in its oversight of the integrity of our financial statements, the qualifications,
independence and performance of our independent auditors; (iii) reviewing and approving the plan and scope of the internal and external
audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to
our independent auditors; (vi) reviewing with our chief executive officer and chief financial officer (or chief accounting officer, as
the case may be) and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions;
and (viii) reviewing and assessing annually the audit committee’s performance and the adequacy of its charter. The audit committee
also reviews and approves all transactions with affiliated parties. Our board of directors has adopted a written charter for the audit
committee, which is available on our website.
The
members of the Audit Committee are Susanne Meline, Matt Hayden, and Sean Magennis, each of whom satisfies the “independence”
requirements of Rule 10A-3 under the Exchange Act and Rule5605(c)(2) of the Nasdaq Marketplace Rules. Ms. Meline serves as the chairwoman
of the audit committee. Ms. Meline is a “financial expert” as that term is defined in SEC regulations.
Diversity
of the Board of Directors
Pursuant
to the requirement of Nasdaq, each year the board of directors, will review the appropriate characteristics, skills, and experience required
for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates, we will consider
factors including, without limitation, an individual’s character, integrity, judgment, potential conflicts of interest, other commitments,
and diversity. While we have no formal policy regarding board diversity for our board of directors as a whole nor for each individual
member, our board of directors will consider such factors as gender, race, ethnicity and experience, area of expertise, as well as other
individual attributes that contribute to the total diversity of viewpoints and experience represented on the board of directors.
The
following is a table indicating the current board diversity.
Board
Diversity Matrix (As of October 11, 2024)
| Total Number of Directors | |
| - | | |
| | | |
| | | |
| | |
| | |
Female | | |
Male | | |
Non-Binary | | |
Did Not Disclose Gender | |
| Part I: Gender Identity | |
| | | |
| | | |
| | | |
| | |
| Directors | |
| 1 | | |
| 7 | | |
| - | | |
| - | |
| Part II: Demographic Background | |
| | | |
| | | |
| | | |
| | |
| African American or Black | |
| - | | |
| - | | |
| - | | |
| - | |
| Alaskan Native or Native American | |
| - | | |
| - | | |
| - | | |
| - | |
| Asian | |
| - | | |
| 1 | | |
| - | | |
| - | |
| Hispanic or Latinx | |
| - | | |
| - | | |
| - | | |
| - | |
| Native Hawaiian or Pacific Islander | |
| - | | |
| - | | |
| - | | |
| - | |
| White | |
| 1 | | |
| 4 | | |
| - | | |
| - | |
| Two or More Races or Ethnicities | |
| - | | |
| 1 | | |
| - | | |
| - | |
| LGBTQ+ | |
| - | | |
| - | | |
| - | | |
| - | |
| Did Not Disclose Demographic Background | |
| - | | |
| 1 | | |
| - | | |
| - | |
Communications
with the Board of Directors
Interested
parties wishing to communicate with our Board or with individual members of our Board may do so by writing to our Board or to the particular
members of our Board and mailing the correspondence to us at MDB Capital Holdings, LLC, Attention: Corporate Secretary, 14135 Midway
Road, Suite G150, Addison, Texas 75001. We will review all incoming communications and, if appropriate, such communications will be forwarded
to the appropriate member or members of our Board, or if none is specified, to the Chairperson of our Board.
All
communications received as set forth in the preceding paragraph will be opened by the office of our Corporate Secretary, which office
will make sufficient copies of the contents to send to each director who is a member of the Board, group or committee to which the envelope
or e-mail is addressed. The Board has instructed the Corporate Secretary to forward stockholder correspondence only to the intended recipients
and has also instructed the Corporate Secretary to review all stockholder correspondence and, in the Corporate Secretary’s discretion,
refrain from forwarding any items deemed to be of a commercial or frivolous nature or otherwise inappropriate for the Board’s consideration.
Any such items more relevant to a subsidiary of company may be forwarded elsewhere in the MDB group for review and possible response.
Code of Business Conduct and Ethics
Our
Board has adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors. The full text
of our code of business conduct and ethics is filed as an exhibit to the SEC filings of the Company on Form 10-K and posted on the Investor
Relations section of our website. The reference to our website address in this filing does not include or incorporate by reference the
information on our website into this filing. We intend to disclose future amendments to certain provisions of our code of business conduct
and ethics, or waivers of these provisions, on our website or in public filings.
Insider
Trading Arrangements and Policies
The
Board adopted an insider trading compliance policy governing the purchase, sale, and/or other dispositions of our securities by our directors,
officers, and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations,
and the exchange listing standards applicable to us. The insider trading policy prohibits the use of material non-public information
about the Company when making decisions to purchase, sell, give away or otherwise trade in the Company’s securities or to provide
such information to others outside the Company. We have established black-out periods to which covered persons are subject related to
the filing of our regular reports with the SEC. The Company may impose additional black-out periods from time to time as other types
of material non-public information occur when material non-public events or disclosures are pending. Covered persons are permitted to
trade in the Company’s securities only when there is no black-out period in effect and such trade has been pre-cleared by the appointed
Company officer, or when a qualified 10b5-1 plan has been established in accordance with federal securities laws. Notwithstanding the
policy, recipients of shares of common stock upon vesting of restricted stock units and similar securities will be permitted to trade
their common stock received upon vesting within 15 days after vesting, so long as they do not have material inside information or there
is an event black-out period in effect. No covered person has adopted or terminated a Rule 10b5-1 trading plan during the last fiscal
quarter of the fiscal year to which this report relates.
Clawback
Policy
The
Board adopted a written policy to recover “excess” compensation that is granted, earned, or vested based wholly or in part
upon the attainment of a financial reporting measure. The compensation includes both cash-based and equity-based incentives. The compensation
covered includes incentive awards awarded to any individuals (including former employees) who served as an executive officer during the
three most recently completed fiscal years preceding the date on which the preparation of an accounting restatement is required, provided
that the executive officers were awarded more incentive awards than they would have received if the financial statements had been prepared
correctly. The recovery will include an executive incentive award even if the executive was not involved in preparing the financial statements
or did not commit misconduct that led to the restatement. Restatements attributable to an inadvertent error also will subject executive
officers to the recovery of previously received incentive awards.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our executive officers, directors
and persons who beneficially own more than 10% of our common shares to file initial reports of ownership and reports of changes in ownership
with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports filed by such persons.
Based
solely on our review of the copies of reports furnished to us, we believe that during the fiscal year ended December 31, 2023, all executive
officers, directors and greater than 10% beneficial owners of our Class A and Class B shares complied with the reporting requirements
of Section 16(a) of the Exchange Act.
Compensation
Principles for Members of Board of Directors
We
plan not to provide director fees to board members who also receive salaries from MDB, its subsidiaries, or partner companies. Should
we appoint independent directors, the board of directors will decide their compensation upon their appointment and on an ongoing basis
thereafter.
We
do not have any defined compensation plan for our directors. We may adopt one or more forms of compensation arrangements, including cash
and stock-based compensation arrangements in the future. Any stock-based compensation plans will be subject to the approval of the holders
of the Class A and Class B shares as required by the listing rules of Nasdaq and any other applicable laws.
We
also will reimburse any persons that are independent members of our board of directors for their reasonable expenses incurred in connection
with attending meetings of our board of directors, committee meetings and other activities they undertake on our behalf and on behalf
of our subsidiaries and partner companies.
Director
Compensation
The
following table sets forth the compensation earned by or awarded or paid in 2023 and 2022 to the individuals who served as our independent
directors during such period.
| Name | |
Year | | |
Fee | | |
Bonus | | |
Shares | | |
Options
Awards | | |
Nonequity
Incentive
Plan
Compen-sation | | |
Nonqualified
Deferred
Compensation
Earnings | | |
All Other
Compensation | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Susanne Meline | |
2022 | | |
$ | 25,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 25,000 | |
| Susanne Meline | |
2023 | | |
| 50,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 50,000 | |
| Matthew Hayden | |
2022 | | |
| 25,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 25,000 | |
| Matthew Hayden | |
2023 | | |
| 50,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 50,000 | |
| Sean Magennis | |
2022 | | |
| 25,000 | | |
| - | | |
| - | | |
| -5 | | |
| - | | |
| - | | |
| - | | |
| 25,000 | |
| Sean Magennis | |
2023 | | |
| 50,000 | | |
| - | | |
| - | | |
| -5 | | |
| - | | |
| - | | |
| - | | |
| 50,000 | |
Mr.
Daniel Torpey will receive an annual compensation of $50,000, starting on July 1, 2024. Additionally, he was granted restricted stock
units under the Company’s 2022 Equity Incentive Plan, which provide the opportunity to acquire up to 100,000 Class A shares. These
units vest at a rate of 20% after the first year and 10% every six months over the following five years. Mr. Torpey also served as a
board observer from January 1, 2024, to June 30, 2024, for which he was compensated $37,000.
Limitation
of Liability of Directors and Indemnification of Directors and Officers
The
Company provides indemnification to each person who was or is a party or is threatened to be made a party to or is involved in any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative by reason of the fact that
he, or a person of whom he is the legal representative, is or was a director or officer or is or was serving at the request of the Company
as a director or officer of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with
respect to employee benefit plans against all expenses, liability, and loss. The board may authorize the advance of expenses in connection
with any proceeding where the person is entitled to indemnification. The Company may purchase and maintain insurance to protect itself
and any director, officer, employee or other agent against any expense, whether or not the Company would have the power to indemnify
the person.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable.
Indemnification
Agreements
We
enter into indemnification agreements with each of the persons serving on the board of directors and executive officers of the Company.
The indemnification agreements provide for indemnification against expenses, judgments, fines and penalties actually and reasonably incurred
by an indemnitee in connection with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations.
The indemnification agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable
judgment or other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee
is ultimately found not to be entitled to indemnification by us. The indemnification agreement sets forth procedures for making and responding
to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between
us and an indemnitee arising under the indemnification agreements.
We
also arrange that there are indemnification agreements between our partner companies and their officers and directors. These indemnification
agreements provide for indemnification against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee
in connection with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations. The indemnification
agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment or
other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee is ultimately
found not to be entitled to indemnification by us. The indemnification agreement form sets forth procedures for making and responding
to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between
us and an indemnitee arising under the indemnification agreements.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
Our
Board is currently composed of eight members. In accordance with our operating agreement, all of the nominees will be voted upon at the
2024 Annual Meeting for a one-year term. Each director’s term continues until the election and qualification of his or her successor,
or such director’s earlier death, resignation or removal.
If
you are a shareholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with
respect to the voting of directors, your shares will be voted “FOR” the election of all of the nominees. If any nominee becomes
unavailable for election as a result of an unexpected occurrence, our Board may designate a substitute nominee, in which event the persons
named in the enclosed proxy will vote for the election of such substitute nominee, unless our Board chooses to reduce the number of directors
serving on our Board. Each person nominated for election has consented to being named as a nominee in this Proxy Statement and has agreed
to serve if elected. We have no reason to believe that any nominee will be unable to serve.
Nominees
The
Board has approved each of the current members of the Board for re-election.
| Name |
|
Age |
|
Position |
| Christopher
Marlett |
|
60 |
|
Chief
Executive Officer, Chairman of Board and Director |
| Anthony
DiGiandomenico |
|
58 |
|
Head
of New Venture Discovery, and Director |
| George
Brandon |
|
65 |
|
President
and Head of Community Development, and Director |
| Mo
Hayat |
|
49 |
|
Head
of Corporate Development & Chief Legal Officer, and Director |
| Susanne
Meline |
|
57 |
|
Director |
| Mathew
Hayden |
|
53 |
|
Director |
| Sean
Magennis |
|
59 |
|
Director |
| Daniel
Torpey |
|
60 |
|
Director |
Christopher
Marlett. Christopher Marlett has been the chief executive officer and chairman of the board of directors and a director of the
Company since inception on August 10, 2021. Mr. Marlett has been since 1997, the Chief Executive Officer and a co-founder of Public Ventures,
LLC (formerly known as MDB Capital Group, LLC). Over his 36 years of working in the securities industry, he has led multiple financings
for venture stage public companies and has dedicated his efforts to optimizing this method to launch promising technology/business platforms.
He has been integral in co-founding and developing the commercialization and financing strategy for all the companies MDB has taken public.
In addition, he has served as a board member of several of the public companies in the early stages. He has invested significant efforts
in developing a human capital development platform in Nicaragua that has led to the creation of the largest call center park in the country
employing approximately 3,000 people and several knowledge process outsourcing operations to support MDB’s businesses. He developed
the first patent services company in Nicaragua that was sold to Murgitroyd an LSE-listed patent attorney and services platform. He is
the co-founder of PatentVest and developed the platform from inception in 2003. He holds a Bachelor of Science degree in Business Administration
from the University of Southern California. Mr. Marlett’s leadership and financial experience position him well to serve as a member
of our board of directors.
Anthony
DiGiandomenico. Anthony DiGiandomenico has been the Head of New Venture Discovery and director since the inception of the Company
on August 10. 2021. He has also served on the board of directors of ENDRA Life Sciences Inc. (Nasdaq: NDRA), a developer of enhanced
ultrasound technology, from July 2013 until present, the board of directors of Provention Bio, Inc., a developer of multiple drug therapies,
from January 2017 until May 2020 and the board of directors of Cue Biopharma, Inc., that develops novel biologic drugs for the selective
modulation of the human immune system to treat a broad range of cancers and autoimmune disorders from January 2016 to October 2019. Since
he co-founded Public Ventures (formerly known as MDB Capital Group, LLC) in 1997, Mr. DiGiandomenico has been enabling investment into
early-stage disruptive technologies. He has worked alongside a wide range of companies in biotechnology, medical devices, high technology,
and renewable energy spaces. Mr. DiGiandomenico holds an MBA from the Haas School of Business at the University of California, Berkeley
and a BS in Finance from the University of Colorado. Mr. DiGiandomenico’s financial expertise, general business acumen and significant
executive leadership experience position him well to make valuable contributions to our board of directors.
George
Brandon. George Brandon has served as President and Head of Community Development of the Company since its inception on August
10, 2021, and as a director of the Company since January 14, 2022. Mr. Brandon’s 36 years of varied investment experience has included
the last 12 years with Public Ventures (formerly known as MDB Capital Group, LLC). Mr. Brandon’s business focus has primarily been
marketing & strategy development and community building in and around entrepreneurial start-ups, micro-cap, and small-cap companies.
Prior to joining MDB, he served as a partner of Trinity River Advisors, LLC, a turnaround consulting firm targeting small companies dealing
with financial distress. He received his education at Concordia University in Irvine, CA.
Mohammad
“Mo” Hayat. Mo Hayat has served as the Head of Corporate Development and Chief Legal Officer of the Company since
May 2024, Chief of Entrepreneurship & Operations of the Company since its inception on August 10, 2021 to May 2024, and as a director
of the Company since January 14, 2022. Mr. Hayat has also served as the Chief Executive Officer of Invizyne Technologies Inc. since its
inception in April 2019, and, effective as of August 2022, transitioned to the role of Executive Chairman and President of Invizyne Technologies
Inc. Mr. Hayat founded and has operated Mora Partners Inc., a consulting and investment firm since September 2006. Notable prior experiences
for Mr. Hayat include serving as an Associate at Latham and Watkins from 2001 to 2006, as Partner at Raines Law Group from 2006 to 2009,
as EVP of Business Development at Fulham Company Ltd from 2009 to 2015, and as Associate General Counsel Corporate, M&A, and Venture
Capital at Hewlett Packard Enterprise from 2015 to 2017. Mr. Hayat also served on the board of directors of Fulham Company Ltd. from
January 2019 to August 2022. Mr. Hayat received his Juris Doctorate in 2001 from UC Berkeley School of Law and a Bachelor of Science
in Biological Chemistry in 1997 from Pepperdine University.
Susanne
L. Meline. Susanne Meline has served as a director of the Company since May 2, 2022. Ms. Meline has been the CEO of Encore Investment
Management, LLC and Senior Vice President, Investments and General Counsel of Wildfire Defense System, Inc. since April 2023. Ms. Meline
is a former special situations analyst at Francis Capital Management, LLC, which she co-founded and where she worked from 2003 through
March 2023. She holds a Series 65 license, is an arbitrator for FINRA Dispute Resolution Services, and has extensive board experience,
including with Finomial Corporation from 2017 – 2019, AquaMetals Corporation from 2019 – 2020, ClearSign Technologies Corporation
from 2018 to 23, Catheter Precision Corporation from 2021 to 24, a Bermuda-based captive insurance company from 2022 to the present,
and Wildfire Defense Systems, Inc. from March 2024 to the present. Susanne has a Juris Doctor degree from University of California, College
of the Law, San Francisco and a Bachelor of Arts degree in Political Science from UCLA.
Matthew
“Matt” Hayden. Matt Hayden has served as a director of the Company since May 2, 2022. Mr. Hayden has managed his
family office since January 2018 which invests in both private and public companies. Mr. Hayden founded and managed Hayden Communications,
Inc, an investor relations firm in 1998 which was sold in 2006. In 2006, he founded Hayden Communications International, Inc. which sold
a 51% stake to MZ Group in 2011. Mr. Hayden then served as Chairman and advisor of MZ Group through December 2019. Since January 2022,
Mr. Hayden has also served as a member of the GP for Surfworks, which builds and operates Wave Garden Surf Facility Projects in the United
States. He earned a B.S. in Finance from the University of South Carolina.
Sean
Magennis. Sean Magennis has served as a director of the Company since May 2, 2022. Mr. Magennis heads global member development
for Tiger 21 since October 2023. Mr. Magennis previously served as Chairman of Mutual Capital Alliance from January 2023 to January 2024,
interim President of CEO Coaching International, a global CEO coaching business from November 2021 to November 2023, CEO and Chairman
of Capital 54, a family office from July 2020 to November 2021, and Founder of Lumini Network, a peer community for Executive Assistants
from November 2021 to present. As Global President and COO of YPO, a global community of 35000 chief executives, from May 2013 to August
2020, as Member of Gateway Green Energy Holdings, LLC, an operator power plants and energy assets, from 2009 to 2023, as President of
Meximae Financiera Corporation, a real estate developer in Mexico, from January 2003 to August 2008, as President of Thomas International
Management Systems from 1991 to 2003, as President of Thomas International, A Caldwell Interest, from 1992 to 1996, and Global President,
Board Member and Chapter Chairman of Entrepreneurs Organization from 1991 to 2007. Magennis is a seasoned international business executive
specializing in scaling professional services firms and peer membership organizations. His experience encompasses professional executive
management, business development and growth strategies, exit strategies, acquisitions, and financing. He advises CEOs with a focus on
business growth, go to market strategies, exit strategies, and leadership transformation.
Daniel
Torpey. Mr. Torpey served as an Independent Board Observer and audit committee observer to the Company’s Board of Directors
from January 1, 2024 to June 17, 2024. On June 17, 2024, the Board expanded the number of directors and filled the vacancy by appointing
Mr. Torpey as a director. Mr. Torpey was an Assurance partner at Ernst & Young LLP (EY) in their Forensic & Integrity Services
practice and retired from EY in June 2024. Mr. Torpey was with EY for over 23 years and prior to that he was a partner at Arthur Anderson
LLP from July 2001 to May 2002, and a partner and held various other titles at PricewaterhouseCoopers (and its predecessor firm Coopers
& Lybrand) from 1992 to 2001. Mr. Torpey served as an auditor in EY’s audit practice from 1989 to 1992. Mr. Torpey served as
a staff and senior accountant at Matson Driscoll & Damico, LLP. from 1986 to1989. Mr. Torpey received his Bachelor of Science in
Accountancy from St. John’s University, Jamaica, New York in 1986 and is a Certified Public Accountant licensed in the states of
New York and Texas. Mr. Torpey is an independent director under the corporate governance standards of Nasdaq, and there are no arrangements
or understandings between Mr. Torpey and any other person pursuant to which he was elected as a director. Mr. Torpey is a qualified financial
expert under the rules of the SEC due to his extensive financial and accounting training and years of employment in several accounting
firms, finishing as a partner with Ernst & Young LLP. Mr. Torpey has been appointed a director of the Company because of his depth
and breadth of accounting experience, due to his extensive training and experiential background in different aspects of the accounting
profession, including direct experience in financial reporting for public companies.
Required
Vote
The
election of directors requires a plurality vote of the Class A and Class B shares, voting together as a single class, present by remote
communication or represented by proxy at the Annual Meeting and entitled to vote. “Plurality” means that the nominees who
receive the largest number of votes cast “FOR” are elected as directors. Any shares not voted “FOR” a particular
nominee (as a result of an abstention or a broker non-vote) will not be counted in such nominee’s favor and will have no effect
on the outcome of the election. You may vote “FOR” or “WITHHELD” on each of the nominees.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
EACH
OF THE NOMINEES NAMED ABOVE.
PROPOSAL
NO. 2
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
Under
the Dodd-Frank Act, our shareholders are entitled to vote to approve, on an advisory, non-binding basis, the compensation of our named
executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. Please read the “Executive Compensation”
section below of this proxy statement for additional details about our executive compensation program.
We
are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement.
This proposal, commonly known as the “say-on-pay” proposal, gives our shareholders the opportunity to express their views
on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather
the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.
We
believe that our compensation policies and procedures are intended to be aligned with the long-term interests of our shareholders. The
say-on-pay vote is advisory, and therefore not binding on the Company or the Board. However, the Board values the opinion of our shareholders,
and the Board will consider our shareholders’ concerns and the results of this vote in making determinations in the future regarding
executive compensation arrangements.
Required
Vote
Approval
of this proposal requires the affirmative vote of holders of a majority of the Class A and Class B shares, voting together a single class,
present by remote communication or represented by proxy at the Annual Meeting and entitled to vote. Abstentions will have the effect
of votes cast against the proposal. Broker non-votes will have no effect. However, because the vote is advisory and non-binding, a negative
vote will be noted but will not be determinative.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS.
PROPOSAL
NO. 3
ADVISORY
VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
In
addition to providing our shareholders with the opportunity to cast an advisory vote on executive compensation, in accordance with the
requirements of Schedule 14A of the Exchange Act and the related rules of the SEC, a resolution will be presented at the Company’s
annual meeting of shareholders to enable our shareholders to recommend, on a discretionary and non-binding basis, whether a non-binding
shareholder vote on executive compensation should occur every one, two or three years.
The
proxy card, the Internet and the telephone proxy submission procedures each provide shareholders with the opportunity to choose among
four options (holding the vote every one, two or three years, or abstaining). In voting on this resolution, shareholders are not voting
whether to approve or disapprove the recommendation of our board of directors.
After
careful consideration, the Board believes that a frequency of every three years for the advisory vote on executive compensation is the
optimal interval for conducting a say-on-pay vote.
Although
this advisory vote on the frequency of the say-on-pay vote is non-binding, the Board expects to take into account the outcome of the
vote when considering the frequency of future advisory votes on executive compensation.
Required
Vote
Generally,
the affirmative vote of the holders of a majority of the votes by the holders of the Class A and Class B shares voting as a single class
is required to approve matters presented to the shareholders. However, because the vote is advisory and non-binding, if none of the frequency
options receive a majority of the votes cast, the option receiving the greatest number of votes will be considered the frequency recommended
by the shareholders.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A
VOTE “FOR” THE PROPOSAL, ON AN ADVISORY BASIS,
APPROVING
THE FREQUENCY OF “THREE YEARS” FOR HOLDING
FUTURE
ADVISORY VOTES ON EXECUTIVE COMPENSATION SHAREHOLDERS VOTE.
PROPOSAL
NO. 4
RATIFICATION
OF APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Our
audit committee has appointed RBSM LLP, independent registered public accounting firm, to audit our consolidated financial statements
for our fiscal year ending December 31, 2024. During our year ended December 31, 2023, RBSM LLP served as our independent registered
public accounting firm.
At
the Annual Meeting, our shareholders are being asked to ratify the appointment of RBSM LLP as our independent registered public accounting
firm for our fiscal year ending December 31, 2024. Our audit committee is submitting the appointment of RBSM LLP to our shareholders
because we value our shareholders’ views on our independent registered public accounting firm and as a matter of good corporate
governance. If the shareholders do not ratify this appointment, the audit committee will reconsider whether or not to retain RBSM LLP.
Notwithstanding the appointment of RBSM LLP and even if our shareholders ratify the appointment, our audit committee, in its discretion,
may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes
that such a change would be in the best interests of the Company and our shareholders. Representatives of RBSM LLP are expected to be
present at the Annual Meeting, and they will have an opportunity to make a statement if they desire, but will not be available to respond
to appropriate questions from our shareholders.
Change
in Independent Registered Public Accounting Firm
On
December 20, 2023 the Audit Committee of the Board of Directors (the “Audit Committee”) of MDB Capital Holdings, LLC (the
“Company”) approved the engagement of RBSM LLP as the Company’s new independent registered public accounting firm for
the year ending December 31, 2023 and to review the Company’s quarterly consolidated financial statements of the 2024 fiscal year.
In connection with the selection of RBSM LLP, the Audit Committee dismissed BDO USA, P.C.(“BDO”) as the Company’s independent
registered public accounting firm on December 20, 2023.
The
reports of BDO on the consolidated financial statements of the Company for the fiscal years ended December 31, 2022 and 2021 contained
no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During
the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through September 30, 2023, there were no disagreements
with BDO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of BDO, would have caused BDO to make reference to the subject matter of the disagreements in connection
with its reports on the consolidated financial statements for such fiscal years. During the fiscal years ended December 31, 2022 and
2021, and the subsequent interim period through September 30, 2023, there have been no reportable events (as that term is described in
Item 304(a)(1)(v) of Regulation S-K), except for the material weaknesses in the design and implementation of entity-level controls across
each of the five components of internal control as defined by the Committee of Sponsoring Organizations (COSO) 2013 Framework to prevent
or detect material misstatements to the consolidated financial statements. In addition, the Company general information technology controls
were not designed, implemented and operating effectively relating to logical access and program change management across systems supporting
substantially all of the Company’s business processes. These deficiencies also resulted in segregation of duties conflicts within
certain business processes. Formal accounting policies, procedures and controls were not designed and implemented across substantially
all of the Company’s business and financial reporting processes to achieve timely, complete, accurate financial accounting, reporting,
and disclosures, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated
financial statements will not be prevented or detected on a timely basis, as previously disclosed under Risk Factors of the Company’s
Form S-1A filed on July 6, 2023, and Part I, Item 4 of the Company’s Quarterly Report on Form 10-Q for the period ended September
30, 2023. The Audit Committee discussed the material weaknesses with BDO, and the Company authorized BDO to respond fully to inquiries
of RBSM LLP concerning the material weaknesses.
Principal
Accounting Fees and Services
During
the years ended December 31, 2023 and 2022, each of RBSM LLP and BDO USA, P.C., respectively, were the Company’s independent registered
public accounting firms.
The
following table sets forth fees billed to us by our independent registered public accounting firms:
| | |
RBSM LLP 2023 | | |
BDO USA, P.C. 2022 | |
| Audit fees (1) | |
$ | 150,000 | | |
$ | 776,822 | |
| Audit-related fees (2) | |
| 135,000 | | |
| - | |
| Tax fees | |
| - | | |
| - | |
| Total principal accountant fees and services | |
$ | 285,000 | | |
$ | 776,822 | |
| (1) |
Audit
fees consisted primarily of fees for the audit of our annual financial statements and reviews of the financial statements included
in our quarterly reports and current reports. |
| (2) |
Audit-related
fees consist of fees billed for services that are reasonably related to the performance of the audit or review of our consolidated
financial statements and are not reported under Audit fees. |
Audit
Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
The
audit committee charter requires our audit committee to pre-approve all audit and permissible non-audit services and related engagement
fees and terms for services provided to the Company by the independent auditors (or subsequently approving non-audit services in those
circumstances where a subsequent approval is necessary and permissible).
Required
Vote
The
ratification of the appointment of RBSM LLP as our independent registered public accounting firm requires the affirmative vote of a majority
of the Class A and Class B shares, voting together as a single class, present or by proxy at the Annual Meeting and entitled to vote
thereon. Abstentions will have the effect of a vote AGAINST the proposal and broker non-votes will have no effect.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE
RATIFICATION OF THE APPOINTMENT OF RBSM
LLP.
REPORT
OF THE AUDIT COMMITTEE
Our
audit committee currently consists of Susanne Meline, Matt Hayden, and Sean Magennis, all of whom are non-management directors. Susanne
Meline is the chair of our audit committee. At the time of this report, issued in connection with the filing of the Company’s annual
report on Form 10-K, the audit committee consisted of Susanne Meline, Matt Hayden, and Sean Magennis.
Our
audit committee is a committee of our Board comprised solely of independent directors as required by the Nasdaq listing standards and
rules and regulations of the SEC. Our audit committee operates under a written charter approved by the Board, which is available on the
Company’s website at https://investors.mdb.com/governance-documents. The composition of our audit committee, the attributes of
its members and the responsibilities of our audit committee, as reflected in its charter, are intended to be in accordance with applicable
requirements for corporate audit committees. Our audit committee reviews and assesses the adequacy of its charter and our audit committee’s
performance on an annual basis.
Our
audit committee has reviewed and discussed the audited financial statements for the year ended December 31, 2023 with management. Our
audit committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board (“PCAOB”) and SEC. Our audit committee has received the written
disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding
the independent accountants’ communications with the audit committee concerning independence and has discussed with the independent
registered public accounting firm the accounting firm’s independence.
Based
on the foregoing, our audit committee recommended to our Board that the audited financial statements be included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC.
Respectfully
submitted by the members of the audit committee of our Board:
Susanne
Meline (Chair)
Matt
Hayden
Sean
Magennis
This
report of our audit committee is not “soliciting material,” is not deemed “filed” with the SEC and is not to
be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before
or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent specifically
incorporated by reference herein.
EXECUTIVE
OFFICERS
The
current officers of the Company are as follows:
| Name |
|
Age |
|
Position |
| Christopher
Marlett |
|
60 |
|
Chief
Executive Officer |
| Anthony
DiGiandomenico |
|
58 |
|
Head
of New Venture Discovery |
| George
Brandon |
|
65 |
|
President
and Head of Community Development |
| Mo
Hayat |
|
49 |
|
Head
of Corporate Development & Chief Legal Officer |
| Jeremy
James |
|
47 |
|
Chief
Accounting Officer |
In
addition to the biographies found under “Proposal 1 – Election of Directors” the biographical information of Mr. Jeremy
James is as follows:
Jeremy
James has been the Chief Accounting Officer of the Company since June 27, 2022. From December 2020 to June 2022, Mr. James served as
Vice President/Controller of Cottonwood Financial. From November 2016 to September 2020, Mr. James served as the Director of Revenue
of Orthofix. From January 2012 to November 2016, Mr. James served as a Senior Manager in the consulting practice of Ernst and Young.
From May 1999 to January 2012, Mr. James served as a Manager with CBIZ/Mayer Hoffman McCann, an audit and tax firm. Mr. James received
a Bachelor of Science degree in Accounting from Azusa Pacific University. Mr. James is a Certified Public Accountant licensed in the
states of Texas and California.
EXECUTIVE
COMPENSATION
Executive
Compensation
This
section provides an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive
officer and our next two most highly compensated executive officers in respect of their service to our company during the years ended
December 31, 2023, and 2022. The amounts indicated for the year ending December 31, 2023, do not include any amounts that may be awarded
in 2024 as bonus compensation. We refer to these individuals as our named executive officers. The compensation information disclosed
herein for our three named executive officers is disclosed in accordance with SEC requirements; such disclosure does not include the
compensation for our other executive officers. Our named executive officers for the year ended December 31, 2023 and 2022 respectively,
are:
Name and Principal Position | |
Year | | |
Salary | | |
Bonus | | |
Shares | | |
Options Awards | | |
Non-equity Incentive Plan Compen-sation | | |
Non-qualified Deferred Compen-sation Earnings | | |
All Other Compen-sation | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Christopher Marlett, CEO (1) | |
2023 | | |
$ | 350,000 | | |
$ | - | | |
$ | - | | |
$ | 12,650 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 362,650 | |
| Mo Hayat, Invizyne, CEO | |
2023 | | |
$ | 300,000 | | |
$ | - | | |
$ | - | | |
$ | 151,800 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 451,800 | |
| Jeremy James, CAO | |
2023 | | |
$ | 180,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 180,000 | |
| Anthony DiGiandomenico, CTO | |
2023 | | |
$ | 300,000 | | |
$ | - | | |
$ | - | | |
$ | 12,650 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 312,650 | |
| (1) |
All
other compensation is from compensation received from commissions. |
Options
Exercisable as of December 31, 2023
| Name | |
Number of securities underlying unexercised options exercisable
(2) | | |
Number of securities underlying unexercised options unexercisable | | |
Equity incentive plan awards: Number of securities underlying unexercised unearned options
(2) | | |
Option exercise
price (2) | | |
Option expiration date | |
| | |
| | |
| | |
| | |
| | |
| |
| Christopher Marlett, CEO | |
| 30,298 | | |
| - | | |
| 21,642 | | |
$ | 1.22 | | |
| 01/31/2028 | |
| Mo Hayat, Invizyne-CEO | |
| 363,575 | | |
| - | | |
| 259,696 | | |
$ | 1.22 | | |
| 01/31/2028 | |
| Jeremy James, CAO | |
| - | | |
| - | | |
| - | | |
$ | - | | |
| - | |
| Anthony DiGiandomenico, CTO | |
| 30,298 | | |
| - | | |
| 21,642 | | |
$ | 1.22 | | |
| 01/31/2028 | |
Name and Principal Position | |
Year | | |
Salary | | |
Bonus | | |
Shares | | |
Options Awards | | |
Non-equity Incentive Plan Compen-sation | | |
Non-qualified Deferred Compen-sation Earnings | | |
All Other Compen-sation | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Christopher Marlett, CEO (1) | |
2022 | | |
$ | 339,583 | | |
$ | - | | |
$ | - | | |
$ | 10,535 | | |
$ | - | | |
$ | - | | |
$ | 225 | | |
$ | 350,343 | |
| Mo Hayat, Invizyne-CEO | |
2022 | | |
$ | 318,750 | | |
$ | - | | |
$ | - | | |
$ | 126,426 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 445,176 | |
| Jeremy James, CAO | |
2022 | | |
$ | 93,500 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 93,500 | |
| Anthony DiGiandomenico, CTO | |
2022 | | |
$ | 262,500 | | |
$ | - | | |
$ | - | | |
$ | 10,535 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 273,035 | |
| (1) |
All
other compensation is from compensation received from commissions. |
| (2) |
The share numbers and financial data relating to the
number of options issued and outstanding under the Invizyne Technologies, Inc. (“Invizyne”) compensation plan, included
herein pursuant to consolidation rules, have been adjusted to account for a stock dividend at the rate of 1.0775673 shares for each
issued and outstanding share of Common Stock of Invizyne, declared and paid on February 7, 2024, and not for the recent two into
one reverse split of the outstanding shares of Common Stock of Invizyne implemented October 3, 2024. |
Options
Exercisable as of December 31, 2022
| Name | |
Number of securities underlying unexercised options exercisable | | |
Number of securities underlying unexercised options unexercisable | | |
Equity incentive plan awards: Number of securities underlying unexercised unearned options | | |
Option exercise price | | |
Option expiration date | |
| | |
| | |
| | |
| | |
| | |
| |
| Christopher Marlett, CEO | |
| 9,583 | | |
| - | | |
| 15,417 | | |
$ | 2.53 | | |
| 01/31/2028 | |
| Mo Hayat, Invizyne-CEO | |
| 115,000 | | |
| - | | |
| 185,000 | | |
$ | 2.53 | | |
| 01/31/2028 | |
| Jeremy James, CAO | |
| - | | |
| - | | |
| - | | |
$ | - | | |
| - | |
| Anthony DiGiandomenico, CTO | |
| 9,583 | | |
| - | | |
| 15,417 | | |
$ | 2.53 | | |
| 01/31/2028 | |
Equity
Compensation
From
time to time, in addition to the cash compensation, we grant equity based awards to our named executive officers, which are generally
subject to vesting based on each of our named executive officer’s continued service with us.
Executive
Employment Arrangements
Christopher
Marlett
The
Company, through MDB Management, entered into an employment agreement with Christopher Marlett on April 15, 2022. Mr. Marlett acts as
the Chief Executive Officer of the Company. Mr. Marlett is paid a base annual salary of $350,000, which may be increased at the discretion
of the board of the Company. He is also entitled to an annual bonus each fiscal year, one-third of which is purely discretionary, and
two-thirds of which to be determined by the board of the Company based on agreed key performance indicators. Mr. Marlett is entitled
to participate in benefit plans of the Company generally available to employees and executives. Mr. Marlett will generally work in the
Dallas, Texas metropolitan area, and he is to be reimbursed for expenses associated with his employment.
Mr.
Marlett was granted 1,000,000 RSUs for Class A shares which vest over five years of the employment agreement, of which Mr. Marlett forfeited
50,000 RSUs on May 13, 2024, a portion of the RSUs have a performance condition tied to the vesting, contingent on his continued employment
with the Company.
The
employment agreement for Mr. Marlett provides for termination under a number of circumstances, including for and without cause, all of
which are set forth with particularity in the agreement. Depending on the circumstance, Mr. Marlett will be paid certain severance amounts
of up to a year’s salary and pro rata amounts of the annual bonus, and various insurance premiums for health, dental and vision
continued under the COBRA benefits. The agreement provides, in addition to any director indemnification agreement, indemnification in
relation to acts undertaken as an executive of the Company.
Mo
Hayat
The
Company, through MDB Management, entered into an employment agreement with Mo Hayat on April 15, 2022. Mr. Hayat currently acts as the
Head of Corporate Development and Chief Legal Officer of the Company. Mr. Hayat is paid a base annual salary of $300,000, which may be
increased at the discretion of the board of the Company. He is also entitled to an annual bonus each fiscal year, one-third of which
is purely discretionary, and two-thirds of which to be determined by the board of the Company based on agreed key performance indicators.
Mr. Hayat is entitled to participate in benefit plans of the Company generally available to employees and executives. Mr. Hayat will
generally work in the Los Angeles, California metropolitan area, and he is to be reimbursed for expenses associated with his employment.
Mr.
Hayat was granted 1,000,000 RSUs for Class A shares which vest over five years of the employment agreement, a portion of the RSUs have
a performance condition tied to the vesting, contingent on his continued employment with the Company.
The
employment agreement for Mr. Hayat provides for termination under a number of circumstances, including for and without cause, all of
which are set forth with particularity in the agreement. Depending on the circumstance, Mr. Hayat will be paid certain severance amounts
of up to a year’s salary and pro rata amounts of the annual bonus, and various insurance premiums for health, dental and vision
continued under the COBRA benefits. The agreement provides, in addition to any director indemnification agreement, indemnification in
relation to acts undertaken as an executive of the Company.
Jeremy
James
The
Company, through MDB Management, has employed Mr. Jeremy James on an at-will basis since June 8, 2022. Mr. James acts as the Chief Financial
Officer, formerly the Chief Accounting Officer, of the Company. Mr. James currently is paid a base annual salary of $250,000, which may
be increased at the discretion of the board of the Company. He is also entitled to an annual bonus each fiscal year, one-third of which
is purely discretionary, and two-thirds of which to be determined by the board of the Company based on agreed key performance indicators.
Mr. James is entitled to participate in benefit plans of the Company generally available to employees and executives. Mr. James will
generally work in the Dallas, Texas metropolitan area, and he is to be reimbursed for expenses associated with his employment.
Mr.
James was granted 100,000 RSUs for Class A shares that vest over five years on each anniversary of the employment, contingent on his
continued employment of Mr. James.
Equity
Incentive Plan
MDB
adopted an equity incentive award plan, the 2022 Equity Incentive Award Plan, that permits it to grant directors, officers, employees
and others that contribute to the success of the Company stock options, restricted stock, restricted share units, deferred stock and
other equity-based awards. The ultimate value of these various awards is dependent on increases in our Class A share price. Awards are
granted to provide the holder of an award with a personal financial interest in our long-term success, encourage retention through vesting
provisions and enable us to compete for the services of employees in an extremely competitive market and industry. Objectives of the
long-term incentive portion of our compensation package includes aligning the personal and financial interests of management and other
employees with shareholder interests; balancing short-term decision-making with a focus on improving shareholder value over the long-term;
and providing a means to attract, reward and retain a skilled management team.
The
2022 Equity Incentive Award Plan provides for award grants of up to a base amount of 6,000,000 Class A shares, plus an additional 25%
of the issued and outstanding Class A shares outstanding from time to time. As of December 31, 2023, there were 7,073,908 Class A shares
committed to the plan. Of this amount, 5,675,000 Class A shares were under outstanding awards, and there were 1,398,908 Class A shares
available for future grant. The plan is characterized as an “evergreen” plan, which means as the number of Class A shares
outstanding increases, the number of Class A shares available for grant under the 2022 Equity Incentive Award Plan increases. Shareholder
approval is required for the plan to comply with certain IRS and Nasdaq requirements. Both the board of directors and shareholders have
approved the plan.
The
board of directors may grant awards under the plan for up to ten years from the date of plan adoption. The board of directors or a committee
thereof will determine the form of award and its terms, such as the vesting period, the exercise period, any vesting criteria that might
include performance goals and termination provisions. Typically, termination will be as a result of retirement, disability and the end
of employment. Awards may not be issued at less than the fair market value of a Class A shares at the time of award. Although awards
are typically exercised for a cash payment, the board of directors or applicable committee may issue the awards on a net exercise, or
cashless, basis. Management makes recommendations to the board of directors or committee about the form of the award, the amount of the
award levels and its terms. Management monitors overhang (a measure of potential earnings dilution from stock awards) as well as run
rate (the rate at which stock awards are being awarded from our equity plans) when making recommendations to the board of directors or
applicable committee regarding plan awards.
Currently,
the plan is not registered under a Form S-8 registration statement. A Form S-8 registration statement for the plan can only be filed
once the Company becomes a registrant under the Securities Act or the Exchange Act and meets the criteria for use of a registration statement
that incorporates certain information by reference. Until registration, any Class A shares issued pursuant under the plan will be “restricted
stock.”
Outstanding
Equity Awards Under Plan as of December 31, 2023
MDB
has granted restricted stock unit, or RSU, awards to Messrs. Marlett, Hayat and James for an aggregate of 2,100,000 Class A shares, of
which 1,100,000 awards vest as to 20% each year from the date of the person’s employment agreement, so long as the person remains
employed by MDB. The remaining 1,000,000 RSUs will vest upon the achievement of certain market conditions, which are outlined in detail
in the following paragraph.
MDB
has issued RSU awards to certain key persons for an aggregate of 2,000,000 Class A shares, These awards generally vest as to 20% of one-half
of the total number of granted RSUs on the thirteenth (13) month anniversary of the listing of the Class A shares on a United States
national exchange and then at the rate of 10% of one-half of the total 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 RSUs will fully vest. The
other half of the RSUs will vest at any time after the 13th month anniversary of the listing of the Class A shares on a United States
national securities exchange and before the five year anniversary of the date of grant, if and when (y) 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 2,000,000 Class A shares or more during the 90 consecutive calendar day period, or (z) 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
by the value of any one or more per share distributions after the date of grant until vested.
MDB
has issued RSU awards to various employees and other persons for an aggregate of 1,615,000 Class A shares that generally vest over a
period of five years, with 20% of granted RSUs vesting on the thirteenth (13) month anniversary of the listing of the Class A shares
on a United States national exchange and then at the rate of 10% of the original amount 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 RSUs will
fully vest.
Each
of the above RSU awards have provisions for an acceleration of vesting for a change of control of MDB and in the discretion of the board
of directors or a committee thereof and may be adjusted by the board of directors or a committee thereof as provided in the plan.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The
following table sets forth information regarding the beneficial ownership of our Class A shares and Class B shares by:
| |
● |
each
shareholder of our Class A shares who is known by us to beneficially own 5% or more of our Class A shares; |
| |
|
|
| |
● |
each
shareholder of our Class B shares; |
| |
|
|
| |
● |
each
of our executive officers; |
| |
|
|
| |
● |
each
of the members of the board of directors; and |
| |
|
|
| |
● |
all
of the members of the board of directors and current executive officers as a group. |
Beneficial
ownership is determined based on the rules and regulations of the SEC as defined in Rule 13d-3 of the Exchange Act. A person has beneficial
ownership of Class A shares and Class B shares if such individual has the power to vote and/or dispose of the shares. This power may
be sole or shared and direct or indirect. In computing the number of shares beneficially owned by a person and the percentage ownership
of that person, shares that are subject to options or warrants held by that person and exercisable as of, or within 60 days of, the initial
closing are counted as outstanding. These shares, however, are not counted as outstanding for the purposes of computing the percentage
ownership of any other person(s). Except as may be indicated in the footnotes to this table and pursuant to applicable community property
laws, each person named in the table has sole voting and dispositive power with respect to the Class A shares and Class B shares set
forth opposite that person’s name. Unless indicated below, the address of each individual listed below is c/o MDB Capital Holdings,
LLC, 14135 Midway Road, Suite G-150, Addison, TX 75001.
Applicable
percentage ownership in the following table is based on 4,295,632 Class A shares and 5,000,000 Class B shares outstanding as of October
11, 2024. Because the Class A shares and the Class B shares vote together on all matters, we also give the percentage ownership of the
combined classes, allocating one vote for each Class A share and five votes for each Class B share.
| | |
Class A | | |
Class B | | |
| |
| | |
Number (1) | | |
Percent of Class (2) | | |
Number (1) | | |
Percent of Class (3) | | |
Percent of Combined Total Voting Power % (4) | |
| Named Executive Officers and Directors | |
| | | |
| | | |
| | | |
| | | |
| | |
| Christopher Marlett (5) | |
| 79,933 | | |
| 2.1 | % | |
| 3,755,000 | | |
| 75.1 | % | |
| 65.3 | % |
| Anthony DiGiandomenico (5) | |
| 26,645 | | |
| 0.7 | % | |
| 1,245,000 | | |
| 24.9 | % | |
| 21.6 | % |
| George Brandon (5) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Mo Hayat (5) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Jeremy W. James (6) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Susanne Meline (6) | |
| 24,500 | | |
| 0.6 | % | |
| - | | |
| - | | |
| 0.1 | % |
| Matthew Hayden (6) | |
| 30,000 | | |
| 0.8 | % | |
| - | | |
| - | | |
| 0.1 | % |
| Sean Magennis (6) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| All executive officers and directors as a group (8 persons) (7) | |
| 161,078 | | |
| 4.2 | % | |
| 5,000,000 | | |
| 100.0 | % | |
| 87.1 | % |
| |
(1) |
Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. |
| |
(2) |
Based
on a total of 4,295,632 Class A shares issued and outstanding as of October 11, 2024. |
| |
(3) |
Based
on a total of 5,000,000 shares of the Class B shares issued and outstanding as of October 11, 2024. |
| |
(4) |
Based
on a total of 9,295,632 Class A and Class B shares issued and outstanding as of October 11, 2024, with each Class A share entitled
to one vote and each Class B share entitled to five votes, representing a total of 29,295,632 votes in respect of shareholder matters
presented to the holders of common shares. |
| |
(5) |
Does
not include 1,000,000 restricted share units (RSUs) for the Class A shares vesting through April 18, 2027. |
| |
(6) |
Does
not include 100,000 restricted share units (RSUs) for the Class A shares vesting from April 30 to June 7, 2027. |
| |
(7) |
Does
not include 4,600,000 restricted share units (RSUs) for the Class A shares vesting from April 14 to September 30, 2027. |
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Transactions
with Related Parties
As
part of the organization of MDB Capital Holdings, LLC and reorganization of MDB Capital Group, LLC (now Public Ventures, LLC), it was
necessary for MDB Capital Group LLC to distribute most of its assets, including making a committed cash distribution, to its then two
owners, Messrs. Christopher A. Marlett and Anthony DiGiandomenico. Thereafter, these two individuals contributed back to MDB Capital
Holdings, LLC certain assets that would continue to be part of the corporate group in exchange for 5,000,000 Class B shares of MDB Capital
Holdings, LLC. The recontributed assets included MDB Capital Group LLC (now renamed Public Ventures, LLC), PatentVest, Inc., and a majority
ownership interest in the common stock of Invizyne Technologies, Inc. The committed cash distribution was distributed shortly after completion
of the private placement by MDB Capital Holdings, LLC in June 2022, in the amount of $2,723,700, the delay of the actual distribution
being necessitated by regulatory requirements of FINRA.
Messrs.
Marlett and DiGiandomenico own all the Class B shares, each of which has five votes per share and vote together with the Class A shares
as a single class on all matters on which a vote of the common shares is required, including the board of directors.
Messrs.
Marlett and DiGiandomenico own MDB Capital S.A., a Nicaraguan entity, that provides services to the Company and its subsidiaries on an
out-source, as requested basis. During the years ended December 31, 2023, and 2022 the Company paid MDB Capital S.A. $1,123,401 and $1,107,313,
respectively. MDB Capital Holdings, LLC continues to have a service agreement with MDB Capital S.A.
PatentVest,
a 100% entity owned by MDB Capital Holdings, LLC, engaged in transactions with ENDRA, a company for which two of our executive officers
serve as board members, Anthony DiGiandomenico, our Chief of Transactions, and Lou Basenese, President of Public Ventures. For the year
ended December 31, 2023, there were no revenues recognized between MDB Capital entities and ENDRA. However, costs incurred amounting
to $16,665 related to transactions with ENDRA have been deferred.
The
Company leased its Dallas headquarters office space in a building owned by Messrs. Marlett until December 20, 2022, when it moved to
new offices at 14135 Midway Road, Suite G-150, Addison, TX 75001. During the years ended December 31, 2023, and 2022, the Company paid
lease expenses to these related parties of $0 and $19 thousand, respectively.
In
July 2022, the Company distributed to its two principal members a cash distribution of $2,723,700.
General
Policy for Evaluating Related Party Transactions
Related
party transactions will be reviewed by the audit committee, generally under its authority to review situations that give rise to conflicts
of interest, as set forth in the Audit Committee Charter. The policy of the Company is to evaluate those situations where an individual’s
private interests interfere or conflict in any way (or even appear to interfere or conflict) with the interests of the Company. A common
situation is one that involves a transaction between the Company and a party that is a director, officer or employee, or their respective
related parties or affiliates or an entity under the control of those persons. The audit committee shall review the material facts of
all related party transactions with the objective of determining to either approve or disapprove the Company entering into the transaction.
The audit committee will review the relevant facts and circumstances of a related party transactions taking into account, among other
factors, (i) whether the transaction was undertaken in the ordinary course of business of the Company, (ii) whether the related party
transaction was initiated by the Company or the related party, (iii) whether the transaction is proposed to be, or was, entered into
on terms no less favorable to the Company than terms that could have been reached with an unrelated third party, (iv) the purpose of,
and the potential benefits to the Company of, the related party transaction, (v) the approximate dollar value and the terms of the obligations
involved in the related party transaction, (vi) the extent of the related party’s interest in the transaction, and (vii) any other
information that would be material to investors in light of the circumstances of the particular transaction. Approval may be a standing
approval for the same types of transactions, where it is warranted. The audit committee may also ratify related party transactions that
have occurred, but related parties are encouraged to seek prior approval of a transaction so as not to face the situation of having to
unwind or modify it.
WHERE
YOU CAN FIND MORE INFORMATION
We
file electronically with the SEC annual, quarterly and current reports, proxy statements and other information. We make available on
our website at www.mdb.com under “Investors”, free of charge, copies of these reports, as soon as reasonably practicable
after we electronically file the material with, or furnish it to, the SEC. The SEC maintains a website that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the SEC. The address of that website is
www.sec.gov. The information in or accessible through the websites referred to above are not incorporated into, and are not considered
part of, this proxy statement. Further, our references to the URLs for these websites are intended to be inactive textual references
only.
You
should rely on the information contained in this proxy statement to vote your shares at the Annual Meeting. We have not authorized anyone
to provide you with information that is different from what is contained in this proxy statement. You should not assume that the information
in this proxy statement is accurate as of any date other than that date, and the mailing of this proxy statement to shareholders at any
time after that date does not create an implication to the contrary. This proxy statement does not constitute a solicitation of a proxy
in any jurisdiction where, or to or from any person to whom, it is unlawful to make such proxy solicitations in such jurisdiction.
HOUSEHOLDING
OF ANNUAL MEETING MATERIALS
The
SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy
materials with respect to two or more shareholders sharing the same address by delivering a single copy of the Proxy Statement, Annual
Report on Form 10-K or Notice of Internet Availability of Proxy Materials, as applicable, addressed to those shareholders. This process,
which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for
companies. This year, a number of brokers with account holders who are our shareholders will be householding our proxy materials. A single
Notice of Internet Availability of Proxy Materials will be delivered to multiple shareholders sharing an address unless contrary instructions
have been received from the impacted shareholders. Once you have received notice from us (if you are a shareholder of record) or from
your broker (if you are a beneficial owner) that we or they will be householding communications to your address, householding will continue
until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding
and would prefer to receive separate proxy materials, including the Notice, or if you currently receive multiple copies and would like
to request householding of your communications, please notify your broker or us. Direct your written request to MDB Capital Holdings,
LLC, Attention: Corporate Secretary, 14135 Midway Road, Suite G150, Addison, Texas 75001 or by telephone at (945) 262-9012. In the event
a shareholder that received multiple copies would like to receive only one copy for such shareholder’s household, such shareholder
should contact their bank, broker, or other nominee record holder, or contact us at the above address or phone number.
ANNUAL
REPORT
Fiscal
Year 2023 Annual Report and SEC Filings
Our
financial statements for our year ended December 31, 2023 are included in our Annual Report on Form 10-K. This Proxy Statement and our
annual report are posted on our website at www.mdb.com under “Investors” and are available from the SEC at its website at
www.sec.gov.
You
may also obtain a copy of our annual report, without charge, by sending a written request to MDB Capital Holdings, LLC, Attention: Corporate
Secretary, 14135 Midway Road, Suite G150, Addison, Texas 75001.
SHAREHOLDER
PROPOSALS
Shareholders
may present proper proposals for inclusion in our Proxy Statement and for consideration at the next annual meeting of shareholders by
submitting their proposals in writing in a timely manner. We plan to hold the 2025 annual meeting in June 2025.
A
shareholder who would like to have a proposal considered for inclusion in our 2025 proxy statement must submit the proposal in accordance
with the procedures outlined in Rule 14a-8 of the Exchange Act so that it is received by us no later than March 1, 2025. However, if
the date of the annual meeting of shareholders in 2025, or the 2025 Annual Meeting, is changed by more than 30 days from the date of
the previous year’s meeting, then the deadline is a reasonable time before we begin to print and send our proxy statement for the
2025 Annual Meeting. SEC rules set standards for eligibility and specify the types of shareholder proposals that may be excluded from
a proxy statement. Shareholder proposals should be addressed to MDB Capital Holdings, LLC, Attention: Corporate Secretary, 14135 Midway
Road, Suite G150, Addison, Texas 75001. We also encourage you to submit any such proposals via email to investor.relations@serverobotics.com.
If
a shareholder wishes to propose a nomination of persons for election to our Board or present a proposal outside of Rule 14a-8 of the
Exchange Act at an annual meeting but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card,
our operating agreement establish an advance notice procedure for such nominations and proposals. Shareholders at an annual meeting may
only consider proposals or nominations specified in the notice of meeting or brought before the meeting (i) by or at the direction of
the Board or (ii) by a shareholder who was a shareholder of record at the time of giving notice, who is entitled to vote at the meeting,
who is present (in person or by proxy) at the meeting and who has delivered timely notice in proper form, containing the information
specified in our bylaws, to our Corporate Secretary at our principal executive offices of the shareholder’s intention to bring
such business before the meeting.
In
accordance with the advance notice procedure specified in our operating agreement, for any shareholder proposal submitted outside the
processes of Rule 14a-8 of the Exchange Act to be considered timely, the required notice must be in writing and received by our Corporate
Secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of business
on the 120th day prior to the first anniversary of the preceding year’s annual meeting. However, in the event that the date of
the annual meeting is convened more than 30 days before or more than 60 days after the first anniversary of the preceding year’s
annual meeting, or if no annual meeting were held in the preceding year, a shareholder’s notice must be so received not later than
the close of business on the later of (i) the 90th day prior to the scheduled date of such annual meeting or (ii) the 10th day following
the day on which public announcement of the date of such annual meeting was first made. Accordingly, for shareholder proposals to be
brought before the 2025 Annual Meeting, the required notice must be received by our corporate secretary at our principal executive offices
not later than March 1, 2025 and no earlier than February 1, 2025. Shareholder proposals and the required notice should be addressed
to MDB Capital Holdings, LLC, Attention: Corporate Secretary, 14135 Midway Road, Suite G150, Addison, Texas 75001.
To
comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the company’s
nominees in connection with our 2025 Annual Meeting must provide notice that sets forth the information required by Rule 14a-19 under
the Exchange Act no later than February 1, 2025.
OTHER
MATTERS
Our
Board does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the
Annual Meeting, the persons named in the enclosed proxy card will have discretion to vote the shares of our common shares they represent
in accordance with their own judgment on such matters.
It
is important that your shares of our common shares be represented at the Annual Meeting, regardless of the number of shares that you
hold. You are, therefore, urged to vote by telephone or by using the internet as instructed on the enclosed proxy card or execute and
return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.
Christopher
A. Marlett
Chief
Executive Officer
Addison,
Texas
October
28, 2024
MDB Capital (NASDAQ:MDBH)
過去 株価チャート
から 11 2024 まで 12 2024
MDB Capital (NASDAQ:MDBH)
過去 株価チャート
から 12 2023 まで 12 2024
