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Equity and Non-Controlling Interests

9 Months Ended

Sep. 30, 2023

Equity And Non-controlling Interests

4. Equity and Non-Controlling Interests

Equity

Preferred shares - 10,000,000 shares authorized, no shares issued and outstanding. The board of directors may designate preferred shares to be issued, and may rank preferred shares as junior to, on parity with or senior to other preferred shares (in each case, with respect to distributions or other payments in respect of shares). Since the board of directors may set all the terms of any class of preferred shares, these are considered “blank check” preferred shares. Currently the board has not defined dividend and liquidation preference, participation rights, call prices and dates, sinking-fund requirements, or terms that may change the conversion or exercise price.

Class A common shares – 95,000,000 shares authorized, 4,295,632 shares issued and outstanding. These shares are common shares and have one vote per share. Currently there is not a defined dividend or liquidation preference.

Class B common shares - 5,000,000 shares authorized, 5,000,000 issued and outstanding. These shares are common shares and have five votes per share. Currently there is not a defined dividend or liquidation preference. These shares may be converted one to one for a Class A common shares at any time and from time to time.

Non-Controlling Interests

During the nine months ended September 30, 2023, the ownership interest in Invizyne was 60.94% and the non-controlling interest was 39.06%. During the nine months ended September 30, 2022, the ownership interest in Invizyne ranged from 56.4% to 59.25%, with the non-controlling interest ranging from 43.6% to 40.75% (weighted average of 42.6%). Invizyne is accounted for the nine-months ended September 30, 2023 and 2022 , respectively, under the consolidation method.

The NCI ownership will be equal to the NCI percentage as of the reporting period. Therefore, there will be a redistribution of equity between MDB and the Non-controlling interest owner. As of September 30, 2023 and 2022, the Company’s equity interest in Invizyne was 60.94% and 59.58%, respectively, and the remaining equity interest was owned by the non-controlling interests as presented below:

	For the Nine Months Ended September 30,
	2023			2022

Invizyne net loss	$	(874,631	)	$	(983,965	)
Weighted average non-controlling percentage		39.06	%		42.6	%
Net loss non-controlling interest	$	(341,631	)	$	(418,677	)
Prior period balance		468,665			522,169
Stock-based compensation		174,413			164,228
Ownership change of non-controlling interest		-			436,894
Ending period balance	$	301,447		$	704,614

During the nine-months ended September 30, 2023 and 2022, the Company owned 100% for both periods, respectively, of PatentVest.

If a change in the parent ownership in a subsidiary from an additional investment or from the issuance of stock-based compensation, a change of the non-controlling ownership is recognized based on the amount invested and the carrying amount of the non-controlling interest is adjusted to reflect the change in the non-controlling ownership in the subsidiary’s net assets. In 2022, since there was a change in the equity, a reclassification of the non-controlling interest in the subsidiary’s net assets is required and demonstrated in the ending period balance above.