MDB Capital Holdings, LLC Commitments Disclosure
10. Commitments and Contingencies
Legal Claims
The Company may be subject to legal claims and actions from time to time as part of its business activities. As of December 31, 2025 and 2024, the Company was not subject to any pending or threatened legal claims or actions.
Net Capital Requirement (Public Ventures)
Public Ventures is subject to the uniform net capital rule (SEC Rule 15c3-1) of the Securities and Exchange Commission (the “SEC”), which requires both the maintenance of minimum net capital and the maintenance of maximum ratio of aggregate indebtedness to net capital. At December 31, 2025 and 2024, Public Ventures had net capital of $8.7 million and $10.7 million, respectively, which was $8.45 million and $10.45 million in excess of the minimum $250 thousand, as required by the Securities and Exchange Commission Rule 15c3-1.
During the year ended December 31, 2025, the broker dealer had existing subordinated loans with MDB, the Parent company, totaling $13.2 million and $1.0 million of accrued interest payable, is subordinated to other liabilities of the Company, and is considered members’ equity for calculating net capital, and is not included in aggregate indebtedness.
Minimum net capital is based upon the greater of the statutory minimum net capital of $250 thousand or 2% of aggregate customer debits, which were $0 at December 31, 2025 and 2024.
To comply with DTCC membership requirements, the Company has committed to maintain at least $5.0 million of net capital in excess of the $250 thousand minimum.
The requirement to comply with the Uniform Net Capital Rule 15c3-1 may limit Public Ventures’ ability to issue dividends to its parent company.
Indemnification Provisions
Public Ventures has agreed to indemnify its clearing broker for losses that the clearing brokers may sustain from the accounts of customers. Should a customer not fulfill its obligation on a transaction, Public Ventures may be required to buy or sell securities at prevailing market prices in the future on behalf of its customer. The indemnification obligations of Public Ventures to its clearing brokers have no maximum amount. All unsettled trades at December 31, 2025 and 2024, have subsequently settled with no resulting material liability to Public Ventures. For the years ended December 31, 2025 and 2024, Public Ventures, had no material loss due to counterparty failure and had no obligations outstanding under the indemnification arrangement as of December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 29, 2024 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.