MDBH

So, at this time, I'd like to turn the call over to Chris Marlett. Chris?

Thanks, Tony. Well, great. Let's get the deck up here. Great. Thanks again, Tony. Everyone, thank you for joining today. I wanted to thank you all for joining. It's been a really interesting time period for us, and we're making a lot of very important changes. I think that I'm excited to communicate our focus and where we're headed going forward for the balance of the year. A quick overview of the agenda, really. I wanted to talk about sort of the backdrop of the microcap markets and what it means for us and really our plan for maximizing our core assets. I don't think that we've done a good enough job about talking about our core assets.

We kind of like to change up the presentations occasionally to basically give you a different way of looking at it, understanding what we've built at MDB and what we think the value is. Those four core assets, some of you might know about, but I'll talk a little bit more as we get into the presentation. We've also got real financial discipline. When you look at our financial statements, it's very hard to really discern exactly what's going on. I'm trying to simplify that so that you understand that we have really a core operating platform that we can make very efficient, that has a lot of leverage. Our objective is to provide that leverage without any real dilution. That's the key.

With all of our companies, whether it be a portfolio company that we're trying to help to get to commercialization and value creation, or whether it's MDB doing the exact same thing. It's called leverage without dilution. That's sort of what's inherent in all the companies that we get behind. Not to use it as an excuse, but really, I don't know that it's generally well known that this sector that's sort of the sub-$200 million market cap area that we operate in of companies we're taking public has been really sort of evacuated to some degree. Where all the concentration is really if you take the top 20 companies that are public today, they comprise over 50% of the total equity market value in the U.S.

If you look at even venture funding, such a huge percentage of it is going to these very, very large companies. The small companies are really languishing, not only in sort of the public markets, but also in the private markets. When you look at the headline numbers of the Anthropic and OpenAI's getting funded, the money moving around is really staggering. When you look underneath it and you look at these small companies, it's a very, very different picture. When you look at overall funding, about 70% of all funding has gone towards AI-focused companies. While we have what I think are some great AI-based companies in our portfolio, I don't know that that translates into total valuation.

I do believe that we've got a great shot of our sort of AI-enabled companies getting into that trend, and that's really what we're focused on for the balance of the year. If you really look at it, both ends of the barbell are very different, and sort of all these kind of tiny companies, both in the traditional venture world and in the public venture world, are sort of being neglected. When you look at these small IPOs, we've talked about it before, but the number of public companies has been dropping in the U.S. We've gone from roughly 8,000 public companies around 2000 to less than 4,000 today. Even though there's 1,000 companies sort of in this sub-$200 million market value area, it only comprises about 2% of the total market capitalization.

If you figure 25% of the companies are in this space, yet it only comprises 2% of the equity market value. These institutional investors, not that they necessarily drive stock prices, but it's just really an indicator of fund flows. What we found is once a company gets to a certain market value and institutions start to participate; we start to see value expansion many times. The game is really how do you get enough coverage; how do you get enough people involved so that eventually what ends up happening, when these companies get to a certain market value, they start to really scale in valuation. We see that consistently. When you look at a lot of these companies, there's a huge difference between a company trading at a $100 million valuation and a $500 million valuation.

You'll see vast valuation differences, and I think the game is, as it gets bigger, it gets a wider audience of people looking at it. Even though you'll say, "Oh, wow, the small cap indices rebounded sharply in the second quarter," the average market cap of, let's say, the Russell Microcap Index is over $2.5 billion, which is a totally different market than the market we're playing in. Again, it's just an artifact that we haven't seen before historically in the development of MDB. It's sort of gone to an extreme level. We do think that at some point, monies rotate. Money typically rotates to value at some point or where there's the most upside. We actually think if the really big end of the spectrum, today we made new highs, that if that segment got pressured, we don't really see that as a real risk for our segment.

We actually think that money will still have to rotate somewhere. We do think that if the big market comes down, it's not necessarily going to hurt the small ones that we think are actually sort of on the floor. We look at it as it's kind of hard to fall off the floor. Again, no promises, plenty of risk factors there, but I just think that that's our view of where the markets are and what we see as the potential opportunity as money rotates again. What does that mean for us and what we're doing? We're not happy with where we're at. We certainly didn't go public with the idea of this happening and our stock being down from where we took the company public.

But when you think about when we went public, the last three companies we had taken public before we had gone public all went to billion-dollar valuations. We expected that in that kind of marketplace, our shareholders would do phenomenally well if, let's say, our next companies went to billion-dollar valuations. That, of course, has not happened. But it doesn't mean that our companies don't have that potential. In fact, many of these companies that we've launched before were trading at very low valuations. Then next thing you know, things changed. If you look at something like a company like Pulse Biosciences that we really started the company, formed it, took it public. The stock, we took it public at four, it went to 40 or high 30s, came down again, went to the 40 again, down to a dollar.

Everybody thought it was left for dead, and today it just made another new high at $46 a share. Again, it can be super volatile and fortunes change with these things. It's really amazing to see what's happened over the last five, six years in this micro-cap sector. I can't emphasize anymore that we feel you're sort of as good as your last performance. When we had Preventice Solutions get bought for $2.9 billion, again, everybody thought it was dead and going nowhere, and next thing you know, it gets a buyout offer close to five times the price it was trading at. Again, this is not a promise, it's just perspective. It's really all it is. Many times we've seen these companies do this, and it doesn't shake our conviction in the potential of these companies. But the price is the price, right?

You guys are looking at the prices and saying, "Wow, maybe these guys at MDB aren't so smart." Our perspective is we've been through this before. Again, I sit here the same way you do. I don't like seeing my stock being down. I certainly don't like the fact that we sold this to other people and the stock is down. But it doesn't change how we feel about what we've developed. We still feel very bullish about what we've developed. We also feel very bullish about our ability to create new companies and a lot of value. We think that we've built a great team, a great platform, and a great process for doing that.

But you got to have winners, and a part of that is the rotation of the asset class, and part of it is picking the right things and making sure they get to commercialization. So really what we're doing is we're working very hard to realize the potential of each asset, and that's where we've sort of redoubled our focus on our existing portfolio to make sure they get to those key value inflection points. So, what we've done, we talked about scaling from one launch every 18 months to three to five, what we talked about at year-end. We talked about AI transforming our sourcing and diligence and our launch models. We still believe all of that. And building a venture portfolio so that we can broaden the risk amongst many companies.

Much of our operating expenses had been invested in those big ideas like PatentVest and our clearing platform that we believe are smart investments. As of right now, what we're looking at is, okay, right now, going out and launching new companies is great. We're still looking for new companies, want to launch new companies, but monetizing our four core assets is really important. So when you look at whether it's Public Ventures, PatentVest, eXoZymes, and Paulex Bio, we see great potential in all those platforms, and we're in the process of really doubling down to make sure that those four assets get to a value inflection point. Our plan has never been after going public to ever really dilute the MDB shareholders. We're not looking to raise more money. We're not looking to go out and spend more money.

As we said, nothing's changed from when we started MDB. We want to distribute the value of those assets as we create them. But more importantly, now with this marketplace, it's not so much let's be aggressive and step on the gas. It's really how do we run a very lean platform? How do we run this thing on $5 million-$6 million a year, but still not only monetize the companies we have that have had historic billion-dollar leverage, but create new ones in a very cost-efficient manner? That's what we did before we went public. And our big idea of scaling those launches is the timing is just not right. And we do think that environment will change, and when it does change, then we can go back to saying, "Okay, can we do more of them?" But right now, we don't need to do more.

We just need to monetize and leverage the ones that we've done and go back to a rifle shot approach until the environment is better for what we do. So I'll delve more into each one of these companies and tell you what we see and why we're excited about them as we've always been, and drill down on those and a little bit more on our results. So Public Ventures, we always looked at self-clearing as a really important thing as these markets transform. A lot of what's happened in the securities markets is things have transformed from companies getting funded with traditional institutional investors at the low end to being heavily influenced by influencers. We've seen money shifts to platforms like Robinhood and others that are much more momentum-based, much more different than sort of your poor fundamental bottoms-up investors in the microcap space.

We think that having a platform that can respond to that was very important. That is why we started Public Ventures. We got this up and running. It was a really great effort by our team to get this up and going, and it was about a five-year effort. It was not easy. We built it on a very lean budget. We built our back office in Latin America, which we think is super valuable to be able to support the platform. As many of you who are clients of MDB know that you can always pick up the phone, get somebody to make a trade for you, or actually give you good customer service. That is not an easy thing to do in this world today, and we have built that and got it up and running. That being said, we are not really leveraging it.

In other words, if we are not launching a lot of companies, if we are not putting out four or five new companies a year and building that marketplace, then what we build actually has value. We are looking to partner it with somebody else out there that has a broader platform and can really use it, and really enables us to focus on what we do, where all the leverage is launching big ideas. We have been in discussions now with several parties, currently about four or five parties, and I think we will be probably a few more. We have actually received some interest, letters of intent to do partnerships or even sales of the platform. We are in the midst of that.

I do think that we want to try and get something wrapped up in the next quarter, and I think there is a very good chance of that with the folks that we are talking about. We are excited to announce how the Public Ventures clearing platform can create more value by offering a much broader platform. To our knowledge, there are no clearing platforms really for sale or for partner right now. Currently, if you look at the discrete clearing platforms that are out there today, there are about 100 of them. We are one of 100, but so many of them are owned by the household names that you are familiar with. It is a unique opportunity for a lot of different types of people to do that.

I also think that what we do in investment banking, Public Ventures, some might call it crowdfunding, is attractive to a lot of different people. We are just trying to find the best fit for MDB so that longer term, as we create new big ideas, we have a great platform and great partner to launch those with. PatentVest. AI took us by surprise to a certain degree. Again, it does not seem like that should be a surprise, but if you look at it, the realization that we hit at the end of the year was AI was changing very rapidly. Not only was the capabilities of AI changing very rapidly, but we saw a lot of the AI platforms being very commoditized.

What we are seeing is that AI, a lot of people were investing heavily in software development, and we were seeing that, geez, what is going to get commoditized in this space? What we realized was the platform we had built at PatentVest was really unbelievably well-positioned to pair with AI to build the law firm of the future, the patent law firm of the future. We have pivoted our strategy quite dramatically to respond to the realization of that. There has been, as you have seen, a whole host of legal tech firms out there getting funded. It has now turned into a mega value market. Just four or five months ago, things like Harvey AI and these things that are serving law firms getting valued at several billions of dollars of value.

What is even more interesting about patent law, it is very different than traditional law, is that it is a federal-only practice. That is why we made the decision to start what we call an ABS law firm in the state of Arizona, which enables us to be an owner of a law firm and bring in business processes that are critical to lawyers to providing great patent work. This is an exciting time to build a home for great patent lawyers, and it really makes a lot more sense for those patent lawyers to operate not in a traditional law firm structure that exists today.

We are super excited because what we are effectively doing is bringing our team of people with best-in-class AI processes to complete the workflow that patent lawyers shouldn't be doing, whether that is associate work, whether that is paralegal work, whether that is foreign filings.

We can do that and basically take these great patent lawyers that are the brilliant minds and provide the platform that they need that works for them, that is very different than what they may be experiencing in a small law firm that has limited resources or a very large law firm that is structured differently for patent law. More importantly, it brings an efficiency level to these companies where we can bring unprecedented efficiency without taking money out of the pockets of these patent lawyers. These patent lawyers can actually make more money while delivering greater efficiency. That is the real story with what AI is going to enable. Great lawyers are still going to get paid for their value, but it is going to be delivered in a much more efficient platform, and the inefficiency that is in that is going to be taken out.

We think great lawyers are going to want to come to PatentVest. We think the most innovative companies are going to see our ability to transform how patent prosecution takes place. We are very excited about it. Another what we thought was a very forward-looking AI-enabled ABS law firm in the immigration space was recently funded at a $750 million pre-money valuation in the VC community. We see that the logic of pairing ABS law with a law firm, a federal practice, just like they did in immigration law, but in a much bigger market than immigration law, could have huge strategic value. Javier Chamorro, who has been running that platform, has done a great job along with the team to basically put together a great strategy.

We're going to be executing a financing for that company to get it off the balance sheet, or I shouldn't say off the balance sheet. We're going to get it spun out as an independent entity where MDB is no longer funding the development. It'll be funded by independent investors. We're giving independent investors the opportunity to invest in PatentVest and then participate in the growth of this platform that we think is truly innovative and is the future of patent law. eXoZymes. eXoZymes has really been making an unbelievable transformation. I think that one of the things that's most misunderstood about eXoZymes is that since we took the company public, people had not seen real commercial traction. I think that that was a bit of misdirection.

What we were focused on was pivoting eXoZymes to seeing that we could scale manufacturing because the bane of Synthetic Biology is it didn't scale. You had companies that created multi-billion-dollar valuations like Ginkgo Bioworks and Amyris and others that were public, and they made great announcements. They announced a lot of commercial deals, but they couldn't deliver. They couldn't deliver on manufacturing. We felt like we had to go out and make sure that we could deliver on that, while also looking for all the molecules where we can really, really get huge valuation inflection.

That started with NCT, but I think the great news is now we have several other molecules which we've talked about, and I think will be talked about by eXoZymes in their conference call next week, that really broaden our ability to bring in commercial partners. I also believe that they are very close to executing a relationship with contract manufacturers or one manufacturer as a strategic partner that could effectively make all of the small molecules that they're developing. We can take the thing that's really held back Synthetic Biology, the manufacturing thing, off the table with multiple compounds, which now opens up the ability to have real commercial discussions. Those commercial discussions have been taking place, and I think are going to be accelerating now that we are developing the ability to scale manufacturing. I think it's a very exciting time.

When you saw the great valuation expansion of those other companies, you saw them signing commercial relationships, which led people to believe that this would scale, but then they disappointed. I believe that now we can prove we can scale manufacturing, those commercial relationships will have a lot more value and could drive what we always believed, multi-billion-dollar value, just like these other companies did. Stay tuned. I think this is really a great time for eXoZymes. It's been a long road, but we think we're very close to seeing those very tangible commercial inflection points that will bring value to eXoZymes and our portfolio. Paulex Bio. Paulex Bio is really getting to an exciting point in time. I think that the company's very close to filing its registration statement for the IPO, and it's quite simply potentially one of the most earth-shattering developments in diabetes.

The reason we funded Paulex Bio is very simple. We believe that this drug has a reasonably good shot at enabling beta cell expansion, which is insulin production, increasing insulin production, whether it be in a type 1 or type 2 diabetic. We believe that when you look at that, and you do that at a very early stage, the implications to the diabetes and obesity wars that are happening in pharma right now is really earth-shattering because this could be the core differentiator for all of these GLP-1 platforms or any of the other cocktails that are happening in this arena, which basically is completely synergistic. Not only is our drug very synergistic with GLP-1s in preclinical models, but it also effectively, as you increase beta cell production, you create a whole different metabolic profile.

We are very excited about it, and I think we are getting very close to demonstrating that it is safe, and that core value inflection point, which is beta cell production. We believe big pharma is going to have to take notice, and we see, again, huge valuation inflection potential, very much like we had in Provention Bio, which we started with the same folks that we started Paulex Bio with. We had the first disease-modifying type 1 diabetes drug at Provention Bio. The size of the market with this dwarfs what Provention Bio's discovery was. We are super excited. We think that data will start to play out in the early part of 2027. I think that everything is on track, to our knowledge, with the clinical trial, and I think they are going to be coming out with their own update very quickly.

We will be getting close to the IPO in the fourth quarter of this year. Our hope is that this could be not only groundbreaking for patients, but groundbreaking from a value inflection point for Paulex Bio and for MDB. When you look at the core four positions, we have 4.1 million shares plus some warrants on eXoZymes. We have approximately 7.1 million shares and some warrants on Paulex Bio with not only core value-creating readouts coming shortly, and we are hoping with eXoZymes, some core value-creating commercial partnerships soon. We own 100% of Public Ventures, and we own 100% of PatentVest.

If you start to do the math and you start to look at through the numbers of MDB and through the balance sheet of MDB, you start to look at that and say, "Okay, what could those be?" We think that there is significant multi-billion-dollar potential in things like eXoZymes and Paulex Bio. We think there is perhaps not in the short run for Public Ventures and PatentVest, that kind of potential, but we think there is great potential for those as well. When you look at how much of these we own and what it can mean, and you do the math, you divide by roughly 10 million shares outstanding, you can start to realize that there is a lot of leverage embedded in MDB shares, and that we certainly do not think it is being reflected in current stock price.

There's no value predictions on this page by design, but I think what you'll see is we have a core belief in all of them. Nothing's changed, and we're looking to make sure that we focus on getting all these things to a value inflection point as soon as possible. I don't need to read Tony's long risk factors again, but all these things, there are no sure things in life, and what we want to say here is while we're super optimistic, you never know what can happen. The microcap market is probably, in my mind, the biggest variable that we're not in control of, and I think execution, we still have to execute on all these. We feel confident in our execution. We're working every day to make it happen, and we're super excited.

When you zoom out a bit, what we're really trying to do is protect against dilution and distribute the value. Again, as we've always talked about, monetize or get to a value inflection is really where we're at, not dilute MDB and distribute those things out because if we can operate on $5 million-$6 million a year and we generate some fees to offset those, you have an enormous amount of leverage in your ownership in MDBH. Looking at first half operations, again, that marketplace, our ability to get things done, we got two transactions done in the first half. We participated in an IPO for Ticket plus, again, closed right after the end of the second quarter. We didn't do a lot of transactions, but it did offset some of our overhead.

Our first half numbers do reflect those two transactions, and the pipeline remains active. We have a lot of really great things in the pipeline. Our quality bar is unchanged, but some of these things, again, you really want to make sure that the backdrop is great to launch these things. The backdrop does impact how many of these we do. When the backdrop is bad, you got to focus on ones that you can absolutely pound the table with impunity with to get done. If you look back at the history of MDB, there's been times, I reference Pulse Biosciences when we did that IPO, we barely got it done, and it was a really, really, really bad time to do IPOs, and we got it done through conviction and through pounding the table, and it's provided unbelievable returns for our shareholders.

We're still going to pound the table and get life-changing things done, but it's not like we're going to be able to get them done at the same rate while the markets are the way they are. We're looking at two transactions. Could be Paulex Bio, could be another one in the second half. When you look at our fee income to offset Operating Expenses, look to those kind of transactions in the second half of the year. We have one fee transaction that we're working on that could be quite significant. There is a lot of leverage in what we do at MDB, and we're hoping to surprise you with some things that we're working on that are not necessarily apparent today.

Again, I talked to the capital discipline as we spin out PatentVest and as we partner off the clearing ops, we can bring down our platform to about $6 million in total Operating Expenses that can be offset. That's a really critical number because it provides a sustainability without dilution, and that's where, as a shareholder, I'm trying to protect against and not have to sell our positions too early and wait for those key inflection points. In some cases, if I saw an opportunity to invest more, to do more, the great news is I don't see that. What I see is that we've invested in these things, they're ready, they need to go off on their own, and the ones that are already public or about to go public, they can live on their own. We're excited. We think it's a sustainable thing.

It's going to be lumpy. It always has been lumpy historically. Since we're not doing three to five transactions a year of new big ideas, it's going to be lumpy, and there's no way to get around it. I would say that as a public company, sometimes you have to deal with the lumpiness, unfortunately. There's sort of no way to get around it. But the underlying value we're still very excited about. I think I've pretty much covered this. Basically, launch big ideas, operate lean, and own equity in meaningful new companies. Tons of leverage. Any one of them becomes a billion-dollar enterprise like the three we launched before we went public. The leverage to MDB shareholders is massive.

It's easy to get morose in environments like this and say, "Oh my God, it's never going to happen." From my perspective, I always say you're only as good as your last performance. That faith in basically that we can recreate the magic is everyone gets tried in these environments, and certainly, whether it's employees, myself, all of us, we get tried, but we still really believe in what we're doing. I'm energized every day to launch these new enterprises. If you look at the 17 IPOs over the 29 years, all of them have traded a significant premium at some time post-IPO and reached valuations enabling follow-on capital. Again, past performance is not a guarantee of future returns, but we're highly confident that as a rotation happens, our companies are going to get noticed.

It is a difficult environment for microcaps, but it's also the place if you're patient and you research your positions well, and we have some really sophisticated investors in our community, and it's an opportunity for them to do their research, dig in, understand them, and they represent really great opportunities and we're trying our best to get those investors to go visit these companies, understand what they're doing, and gain their own conviction, because that's the key in these hard times. What keeps us excited is we know that we're creating companies that make a positive difference. That's what keeps me still working today, is in doing what I'm doing in difficult times. We know that these companies are game-changing potential companies that really, really will make a difference. It's the only reason I do what I do today.

It is an exciting time to be alive with what is happening in AI, what it is enabling for companies like eXoZymes, like PatentVest, and others. It really is one of the most transformative periods in our history. We really want to thank you for being part of our community and at MDB and help to make a difference in what we do and with all these companies we launch. With that, George, I will open it up to you. How do I, let's see, end, click to exit.

You are good. Hey, look, the first question is, can you talk a little bit about how these portfolio companies, obviously with PatentVest and the Public Ventures broker-dealer, you have control of those, but with, like, say, eXoZymes and Paulex Bio, what are you doing to help these companies kind of recognize or their full value or help them for people to know about them and learn about them? What are you doing for portfolio companies? What impact are we having as a firm on those companies?

Well, I think that what we have to offer, especially after launching, is our close to three decades of experience of how to manage it. If you look at eXoZymes is a great example. The team at MDB spent a lot of time on eXoZymes. The markets have pivoted and changed, right? To us, it should be obvious that these guys could finally deliver on Synthetic Biology, but we have had to pivot and say, "Listen, guys, let's help on commercialization. Let's pick up the phone. Let's actually help eXoZymes secure those commercial relationships." Our community, us, we have a lot of relationships that can bring to bear on that. We are doing that. We are spending real time with the team at eXoZymes, not taking anything away from them. It is all hands-on deck, right?

With regard to getting recognized, we have to really dig in and help them to translate that to the world. It is very, very difficult. It is a complex science, but we have spent a lot of time working with a team to simplify it and translate it. You take a company like Paulex Bio, same thing. You have got the life science sector, in a sense, has come back a bit. Obviously, the sector they are in is super exciting, super vibrant. But making very tough decisions about what is the best way to go public. Do you go public with a partner on board already, or do you just do the IPO before, which is what our plan has been? There is a lot of real considerations in helping develop these companies and helping develop the value of these companies.

I think connecting the dots is really the key thing for all these small companies. These small companies, there is a wall of doubt and worry that surrounds all these things, and it is really making it obvious to investors that they have the right plan to get there, right? We spend a lot of time on that. Then just getting them in front of people, right? That is what you do in the community. We got to get them in front of people that can make a difference. I do not think that your average. We are not really an investment bank per se, even though we own one. But most investment banks are just interested in getting a transaction done and getting paid. We are interested in seeing the stock go up.

We are redoubling our efforts, and when the markets are slow, it gives us more time as a small organization to help these companies. That is great. It also gives us more time to focus on the launch of PatentVest and also more time to get some sort of value-creating deal with Public Ventures as well. If the current market is slow and new launches are more difficult, then you focus on the ones you have and helping get them there. We are a small but mighty organization in our own mind, and you just got to focus. I think the idea behind this presentation was to say, "Hey, we are focused on getting these core assets that we have not fully realized to realization of their value.

It is great. It was great hearing about the different companies. But as a shareholder for MDB, can you talk a little bit about what you have been doing, what you are planning to do? This is a pretty good story. If you buy into the leverage here, how are you getting that story out and the message out to other shareholders so other people would join in here with where the stock is at? What have you been up to?

Well, I have been doing a few podcasts. I do not know how, again, sometimes we go out and go to these conferences and what have you. But we went to the Planet MicroCap conference, and they put on a wonderful conference. I do not want to take anything away from them, but it is a little depressing to see how unpopulated these conferences are, right? We have been to two MicroCap conferences, and we know that waxes and wanes and changes and whatever else, but there is just not a lot of new blood there. You get out to conferences where I am doing a few podcasts. I do not know how much reach they really have. You try and simplify and tell the story in a different way. But when your asset class is out of favor, it is challenging. But like I said, nothing stays constant.

Everything is always changing. You just be consistent with out there informing people, getting the message spread the best you can. We talk to these family office platforms or RIA platforms. It is really interesting. What I love is people love the concept of what we are doing, and they understand it from an intellectual perspective. That is not where the money is flowing, so they are no longer putting money in private equity as much. They are no longer putting money in traditional venture as much. They do not need to because you can buy Nvidia and just get all the liquidity you want and make lots of money, until you cannot. I think that is the way I look at it, is we just stay consistent, do that work, continue to tell the thing. If anyone has got any bright ideas, we are all ears.

We certainly do not believe we have got it all figured out. We rely upon our shareholders telling us what they think and what we can do.

HeartBeam did not make your four horsemen there, but our share position on that is small compared to the other four, obviously. One of the questions here is, what do you feel about HeartBeam right now and the technology and where the company is at?

Again, we completely believe in their platform. It can be completely transformative. Nothing has changed. They have got the ability to, with an ambulatory device, read ECG signals better than anybody that we know of. I think that they have now acknowledged that trying to launch the product on their own was not the right approach, and I think that there are plenty of people that could integrate that technology platform into their product or service category. It is more capital efficient. If the market is going to dilute you have got one of the best technologies out there, why would you dilute your shareholders to do something that is super capital-intensive at this price? Quite frankly, they do not have the team to launch the product appropriately. We try to give good counsel to them, but we do not run the company.

But I think that their strategy now is the right strategy, and now they need to, whether it is work with foreign governments or work with other ECG makers, other ambulatory monitoring companies, whether it be wearables or whoever, this device needs to be in every airport and every airplane and every public office and every sports team. This device needs to be everywhere, every health clinic in the world. Because it is going to save millions of lives. But they have to do the partnership deals, much like eXoZymes. It is all about partnership deals. You got to leverage your technology platform with people that have the channels open already. I was very happy to see they are moving in that direction. It extends their runway, enables them to get to commercialization with less dilution. Nothing has changed except the stock price is depressing.

But again, for somebody that does their work and goes in there and understands it, spend some time with management. I think now that their strategy is, I think, the right strategy, this could represent an unbelievable opportunity for investors.

Okay, back to eXoZymes, and final question. If you have a question, go ahead and hit that Q&A button down at the bottom of the screen and type it in. But we have got time for one or two more questions. But regarding eXoZymes' financing, they were hoping to raise a lot more money, ended up raising around 6. Can you characterize the challenges? I think you kind of have already, but you might want to re-summarize where they were at and where they are going.

You want to manage dilution. Again, they are also capital efficient. They have huge asymmetric upside. Their OpEx, depending on grants or whatever, around $10 million a year. I think that one of the things that we have talked about is if NCT becomes its own platform that is funded separately, that becomes a real, not only value-creating event, but also lessens the capital needs of developing NCT. But I think there are other molecules that they can do deals on as well. So, I think that you could see strategic investments. You could see spinouts that help fund things that are non-dilutive, right, that actually create value. I am not promising those things. I am just saying that I know those are things that they are working on, and that could happen.

I think once you get to a value inflection point by these commercial deals happening, these offerings become less dilutive, and more importantly, it becomes easy to do a financing once people clearly see that this thing is going to be commercial and it's no longer just a technology platform. I think that, as soon as we see those commercial deals happen, I think people are going to get it.

Okay. Well, we're going to go ahead and wrap it up. Tony, do you have any closing comments before Chris wraps up?

No, George, I think if that's all we've got for today, we just want to say again, thank you for attending, and this will wrap up today's call.

Thanks, everyone.

everyone to the MDB Capital Holdings fourth quarter and full year 2025 update conference call. Thanks very much for joining us today. At this time, all participants are in the listen-only mode. Before we begin the formal presentation, I'd like to remind everyone of several important things. Today's conference call is being recorded. A question-and-answer session will follow the formal presentation. If you have any questions during the presentation, you can type them into the Q&A chat to be answered during the Q&A session. Remember, questions can only be seen by the moderator. Please remember that statements made on this call and webcast may contain provisions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially.

You're cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Also, please be aware that we are not obligating ourselves to revise or publicly release results or any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we'll attempt to present some important factors relating to our business that may affect our predictions. You should also review our most current Form 10-K for a complete discussion of these factors and other risks, particularly those under the heading of Risk Factors. A press release detailing these results, which crossed the wire this afternoon, is available in the investor relations section of our website, mdb.com. A replay of this call will also be provided later on mdb.com.

Your host today is Chris Marlett, Chief Executive Officer and Co-founder of MDB Capital Holdings. He'll be joined later by George Brandon, MDB Capital President and Head of Community Development. Chris will lead an update on the fourth quarter ending December 31, 2025. At this time, I'll turn the call over to Chris Marlett. Chris?

Thanks, Tony. Well, thanks everyone for joining today. I'm excited to be here and talk to you about what's been happening. It's been a while since our last call, and the year's gotten off to a really interesting start. I thought I'd first, you know, kinda just talk about our agenda, which I know most of you are very, very interested in, you know, you know, where our assets are, what we think about our current investments, and, you know, what we see for the future. I wanted to take some time to give you sort of a view from, you know, the way we're looking at building this business and why we're so optimistic for the future of MDB.

We just published, which you should all have as shareholders, year-end shareholder letter, which we'll talk to a lot of what we're gonna talk to today, but in a bit more detail. It's. If you can get through it's about nine or 10 pages. I think it does a pretty good job of giving you a real good view of where we see the business, where we're headed, and why we're excited about the future. With that, I'll start off with just reminding everybody our story. Really, we've taken this proven model of launching companies about one every 18 months, where we helped to conceive of a big idea, bring it and position it for being public and having value in the public markets, and then taking them public.

We did that before we were public and, you know, it was a very nice business. Of course, the reason we decided to go public was that we believed we could scale that to three to five launches a year. Maybe not overnight, but we really believed that we could do that, have a lot more impact, and build a real organization to build public venture really kind of into an asset class where we could actually build portfolios for our investors as opposed to just, you know, most of our investors historically had one or two of our companies in their portfolio. We did that for 29 years. We just did our 18th IPO. Never a failure means we never, you know, failed to get an IPO done.

Every one of them, you know, except for the last one, which is, you know, very new, it's only a couple of months old, have traded at a very significant premium to the IPO price. That really, I think, speaks to what we've done from an asymmetric value positioning perspective, bringing companies public at a reasonable valuation and the promise of them caused them to trade at values much higher than what we took them public at. All those companies had the opportunity to raise additional follow-on capital, and we create a lot of equity value, not just fees. You know, the scaling is really what we're talking about.

Talking about where we came from and, you know, I've been in the business now for 40 years and, you know, my mission has always been, before we even started MDB, was how do we get to the truth quickly? How do we understand the companies that we're getting behind or the opportunities we're getting behind and creating or many times creating these companies in conjunction with inventors or universities or entrepreneurs. In the old days, we would, you know, look at 10-Ks and 10-Qs. You literally have to call Washington and get these filings. It was a very haphazard approach to trying to learn about companies. These were all public companies. If we had a private company we were gonna take public, the information challenge was really crazy.

As a result of the Internet, you know, we launched PatentVest in 2003, which enabled us to really understand deep tech very much in a clearer way because we could get our minds around what somebody owned and how it was differentiated from somebody else out there in the technology landscape. That gave us, in our mind, a real ability to really understand the critical elements to building leadership. This leadership we saw was the critical element for these companies being able to trade at billion-dollar valuations or have the potential to trade at billion-dollar valuations.

As we refined it, we in our screening criteria and our processes and trained our analysts, we could start to filter, you know, companies where, you know, instead of going from a handful in the old days or maybe 100 a year after PatentVest, we got into the point where we could re-review thousands per year, really because we could get through an idea in an hour or two by understanding, did they have the ability to be a leader in a technology vertical pretty quickly with the development of PatentVest.

We still had really a bottleneck, and we've really experienced that bottleneck over the last, you know, couple of years since going public at MDB, which is we can, you know, find a big idea, we can pull it together, but really that process of getting a position to create real value in the public marketplace is a very, very labor and time-intensive process. The due diligence and all the market insertion risks and competitive mapping and the business IP strategy and then really getting the company positioned to be able to communicate its value add is very tough. It's still tough. It's always tough with a big idea. That would consume hundreds if not thousands of hours, and it would take, you know, many months to get these companies ready to go public.

This has really been our reality and quite frankly, our biggest challenge in scaling that we've had. I have to say, I referenced in my letter that AI really is a game changer for us, and we're committed as an organization to using it at every level. I would tell you that even the last 90 days has just been kind of earth-shattering for us in the ability for us and our teams to really solve that information challenge that almost every company faces, and we certainly face in getting these companies ready for being public. When you think about the Internet, it really did a great job of catalyzing and organizing that information, but it really created, you know, sort of overload and inertia.

You had almost too much information. Even when we were looking at patent data, when we first started, you would look at, you know, you would do a screen, and you would look at thousands of patents. Well, getting through those thousands of patents was virtually impossible. It would take, you know, really unbelievable amount of man-hours to make that happen and really understand how a company could differentiate itself from the other companies in that field. What AI has really done, and really done in a very, very tangible way, you know, literally in the last 90-120 days, is it eliminates that inertia. It really connects the dots at an unprecedented speed.

When you couple that with our expert analysts that have created the SOPs, if you will, to actually screen through these companies like we did very manually before, those SOPs applied through agentic models in AI is really become almost unbelievable. What we're seeing, whether it's with patents or whether it's with new business opportunities, we're able to get to the truth super fast. We're able to connect dots we could never connect before, and this is going to have a unbelievably profound impact on our business. I know AI is sort of the catchword of today and, you know, every AI company that comes in to look for funding, I'm always very skeptical of.

I can tell you that as far as using really off-the-shelf AI, things like Claude, you know, day-to-day within our operation and now building SOPs and agents to effectively execute what we can do, doesn't mean we're gonna actually lay off anyone or fire anybody like has been put in the press. What it enables us to do now is really scale in an unbelievable way. The transformative impact in a real tangible setting is becoming real, and we really believe that our ability to effectively boil the ocean of opportunities is achievable.

We're in the process of continuing to develop these agents where we can literally look not only for new companies through our patent data, but from grant databases, from, you know, conferences, anywhere we go where we see opportunities where we can feed it in with our specific criteria. These agents can now do the work of hundreds of analysts and then start to boil the ocean and get these things narrowed down to where now our analyst team, who are experts in understanding whether or not these are, you know, real genuine opportunities, can be boiled down very, very fast to, you know, a very small stack of companies.

Even if, let's say 5% of the opportunities made it through our screen, whether it was companies that were brought to us by friends or colleagues, you know, the real hard work was the deep due diligence. That deep due diligence was very, you know, that's what took the hundreds if not thousands of hours to do. In fact, you know, every one of these companies were facing the same thing. They're trying to get to the answers quickly. The boards are trying to figure out what strategy to employ. The information divide is just really, really difficult, especially when you're talking about deep tech or disruptive technology. We really estimate that we can compress that time by 2/3. It's really astounding.

You know, you're gonna see it, obviously, as investors, right? You can put in every one of our deals. You can put the prospectus in, you can query it, and you guys are getting the questions quicker. And we're seeing already in the last 90 days, the questions we're getting from investors and the insights we're getting from investors is really astonishing. I mean, it's really fun for us because, you know, our mission is to get to the truth as fast as possible. You know, we're experiencing this real time. It's like something I've never seen before. But then when you actually wanna prepare that company and take it public, it would take from six to 18 months, and I think we're gonna be able to get this done in weeks.

To give you an example, we just started on the S-1 for POLX to take it public. You know, our team could actually put together a pretty good draft for the S-1 pretty darn quickly. I think, and again, we're still in the early stages of really implementing all these processes within our organization. Whether it's the financial models, the business strategy, the IP positioning, we see this being done in weeks, not months, which has, you know, when you talk about the scale issue that we faced, you know, we're seeing this as a total game changer for our ability to scale. Throughout our business, whether it's through PatentVest, through, you know, all of our investor diligence, I mean, this whole thing is gonna change.

It's gonna change how our community reacts to deals. It's gonna change how deals get distributed. It's gonna change it at every level, and we're seeing it real time right now. Since we've gone public, one of the things that I don't think has been very apparent to everybody that is really just been focused on figuring out what one of our deals is worth or whether they should buy it or what eXoZymes might be worth is that we've been investing in MDB Direct in our clearing operations and PatentVest to really build those as separate discrete assets. Yes, they're very, they're very obviously critical and important in our daily operating business, but they really are distinct assets in their own right.

We've been investing about $4 million annually since the IPO in these assets. That is super apparent because we've been able to take and, you know, and stand up these two enterprises to where they now, in our mind, have significant independent value and are in effect big ideas that are going to be launched off into their own entities very soon. In MDB Direct, what we did was super unique. We knew that scaling IPOs, especially public venture IPOs, was going to not a thing that is done with traditional institutional investors. Traditional institutional investors are looking for ideas that are much more highly developed.

A lot of these companies that are, you know, sort of in the development phase that are going public, a lot of them were starting to get funded by crowdfunding and other platforms like this, Reg A pluses, things like that. Now we're seeing, you know, things like companies like Robinhood now being key distributors for these kind of offerings for big companies like, you know, the big major underwriters. Distribution is changing in a very, very dynamic way. The key differentiator is clearing. Folks like Robinhood had to become, had to go self-clearing. They used to clear it through other people. Most of the broker-dealers that operate in the microcap marketplace, none of them are self-clearing or virtually none of them are self-clearing.

They're recognizing to be able to operate and access these investors, clearing could be a clear differentiator. Clearing is also the ability to be profitable. In many cases, you know, stock loan, margin lending, etc. These things are key, you know, cash generators for any company in our space that has any kind of assets that are built on their platform. We know that what we've built here is a very, very valuable asset. It took five years of work, with our vendors and our software developers and what have you, to get this up and running.

It's a super valuable asset, and I think that we're looking forward to being able to scale that asset and at the same time create value and monetize the asset. Really the big opportunity for MDB Direct is a strategic partnership to monetize the asset and also help solve our distribution challenges at scale. I talk about it in the letter a bit, but. When you go from one company every 18 months with a very small community and effectively a few relationship managers that, you know, that work within our organization, to go to three to five companies a year and really start to scale this, we have to basically solve the distribution challenge.

Again, I spoke about public venture as sort of being a very much an individual investor-oriented asset class, where you can look back to the IPOs of even companies like Amazon and Tesla that went public through larger underwriters, but the institutional investors were not major players that drove valuation in those companies. Even today, you know, SpaceX is talking about going public and raising a lot of money. Elon Musk is smart enough to know that he needs to have retail distribution. He's figuring out ways to do that in the offering because he knows they're gonna end up being the people that really wanna own the stock. The institutional investors many times came a lot later.

We see an opportunity with these firms that don't have self-clearing, that are recognizing that distribution is gonna change, that this is a real opportunity to partner with either other firms to spin this off as its own entity, to sell it outright and then clear it through whoever we sell it to. We see this as a very valuable asset. You know, to our knowledge, there's no other clearing firms for sale or partnering capability right now. When we were looking to do this, there was only one clearing firm that was set up for sale or for partnership.

That firm, you know, even with a lot of challenges and really not, you know, a huge platform, sold for, you know, tens of millions of dollars. We see this as really exciting. It's now operational, it's working, and we're now just starting active discussions with various folks, and we're seeing this as a really a force multiplier. Not only generates some value for the shareholders, but also a partner on distribution, which I think could be a really great, you know, thing for what we're doing as we have the ability to curate more big ideas. PatentVest, just, you know, the other big idea, just, you know, as big as clearing was to become a law firm.

We had built a patent research company before and sold it before we had gone public. That company was very you know, very limited by the fact that we weren't a law firm, 'cause we could do research, but we couldn't really render opinions. We had to be careful with attorney-client privilege. A lot of our analysts were in Latin America, which made a lot of people nervous. With that, we were able to sell to a U.K.-based law firm. Because in the U.K., they were able to go public. Then as we, you know, went forward and the ABS program became a possibility, we became one of the first ABS IP law firms, and it's been really phenomenal.

Javier Chamorro, who runs you know the operation, has done a great job of getting this up and going to where we have all the core operations of a law firm from you know patent prosecution to foreign you know prosecution management to docketing to maintenance fees. All the various things you need to do that, in addition to all the front-end research that enables us to start to provide a lot more value and create higher quality patents and you know a better experience for small companies and large companies that are looking to be more efficient and create higher quality.

What we see is by being the you know the first potential ABS law firm to go public, which makes a lot of sense, and take this from being a real legal process to a business process, we can now partner with these big law firms like we used to before we sold the patent research business. We think that big law is facing an existential crisis with regard to what's happening in patent prosecution. A lot of the big law firms see that prosecution is a process business and that their high-level legal talent really can be best focused on strategy and litigation. We're having some great discussions with these law firms, and we're looking forward to seeing this develop. It turns out it's a huge business.

If you look at patent prosecution in the U.S., I think $10 billion-$15 billion is a conservative figure for how big that business is in the U.S. We really think that we can garner a really meaningful share of that business by partnering with big law firms. We're really excited about this. I think that the AI legal tech market is booming. Obviously, there's been tons of money going into that market. We don't wanna call ourselves an AI legal tech company, 'cause really what we are is a law firm that is going to embrace AI. I think that a lot of these platforms have been funded. There's probably. I wouldn't be surprised if there's 100 AI legal tech law firms out there currently.

I think we're in this really great position to be able to participate in this area, create a lot of value, and we're looking to spin this out as an independent entity and finance it before year-end, as we touched on last year. Our portfolio assets, we have two portfolio assets outside of MDB Direct and PatentVest that I think can create a lot of value. Obviously, eXoZymes, which is public, and POLX, which we recently funded and are planning to take public later this year, are again a billion-dollar market cap potential, just like everything else we've done historically. Talking about eXoZymes.

eXoZymes is at a really critical point in its development, and I think that what had happened with eXoZymes is that initially the strategy was, let's go out and partner with, you know, pharmaceutical companies to go help them make stuff they can't make. We recognized at eXoZymes, as I'm on the board there, that in fact we could make things that nobody else could make. If we could do that, why wouldn't we just make them and sell those products? I think that the promise of SynBio is about ready, is upon us. Because companies like Ginkgo Bioworks, everybody thought that they had cracked the code for being able to scale manufacturing in SynBio, when in fact they hadn't.

They created a lot of partnerships, and they had a lot of sort of irons in the fire. What we realized is focusing in on a couple really big ones was really super critical and making sure that we could scale manufacturing. As you've seen, hopefully you've seen, that technology is now being turned over to contract manufacturers and being demonstrated that it scales, which is something that's never really been done in our experience in SynBio. It's again, this is a company that, you know, I don't know that anyone's gonna wanna, you know, value SynBio at $20 billion again, but I think that the headroom on this, when you look at the current market value of the company, is pretty immense.

We're pretty excited that we're at this critical point now. Paulex, I won't spend a lot of time on. We're gonna have an update for those of you that participated in Paulex, but quite frankly, we're hoping to initiate the clinical trial in September at the same time the IPO goes. Again, another game-changing potential drug that would touch both Type 1 and Type 2 diabetes by producing insulin, by helping the body to produce insulin, again, or produce more of it. It's. You know, we started the company with some of the same folks that we started Prevention with, that know diabetes and that we've had a lot of success with. We're very excited. I think that, you know, look forward to this IPO later this year.

We're super excited that the clinical trial results, you know, could start to emerge at the end of this year or early next year. They could be really groundbreaking. When you look at our four principal assets as it stands right now, eXoZymes, you know, has a current sort of market valuation. At year-end, it was about $45 million. The stock's come down a little bit. It's at about $30 million in market value currently of what we own. POLX, we own 7.1 million shares of that. It's yet to be seen what we'll price the IPO at, but it could be a very substantial asset.

MDB Direct, again, you know, not making promises on the value, but, you know, clearing firms of this type have sold for tens of millions of dollars. I think we're in an environment where, you know, the value of this could be much greater with where the world is going from a distribution perspective of new offerings. Of course, PatentVest, we've been investing in for a long time, has, in our mind, a lot of value. We've invested, you know, many millions of dollars in the development of PatentVest since 2003, and even more so since we've been public, to get it ready as a law firm and ready for launch.

Then a combination of our cash, current assets through market securities, less all the current liabilities at year-end was about $22.3 million. One of the, you know, sort of footnotes was we thought we were gonna get Buda Juice done before year-end, but it ended up trickling into January, so it'll give us some benefit in the first quarter. When you look at the financial overview, I tried to simplify it as much as possible. Obviously, you can read the 10-K for yourself, but we have about $10 million in fixed operating expenses, and we burned about $5.7 million, if you look at the cash flow statement for the year.

If you look at the investment we've made in the clearing ops and PatentVest, it was about $4 million, which was $4 million as part of the $10 million. If you effectively took the $4 million off of the $5.7 million, we would have in effect burned $1.7 million. I think that a lot of people, when they're looking at, you know, our operating, you know, statements, I don't know that that's super clear to everybody. If, you know, post the spin-out of our clearing platform and PatentVest, you know, our OpEx will go down to about $6 million a year, which when you now look at the number of companies we can launch and how much equity we earn in those companies, we have huge financial leverage.

Even if you look at, you know, the equity position that we earn from, you know, co-founding Polaryx this year, that equity is certainly worth, in our minds, a lot, worth a lot more than what we burned from a cash perspective this year. We think we generate a significant equity value that's really not apparent in fiscal year 2025, but going forward, we've seen this leverage as being really, you know, unbelievable. I think that, you know, all of our things have, you know, billion-dollar capabilities, and if we can launch three or five a year, you know, on a $6 million in OpEx base, I think we're gonna have a really. You know, we could drive a lot of really important shareholder value.

What could go wrong? Well, this is not a sure thing, it's public venture, right? What I would say is that there's a lot of interesting things going on that we faced since we've started. There's obviously a lot of macro and global risk. I have no idea how it's gonna turn out, nor do I wanna venture a guess. The microcap market conditions have been very difficult. A lot of these companies, because of the venture markets and small public markets, were having such a difficult time. Many of these companies face such horrible dilution. There were lots of institutional investors investing in the space, but the dilution of these small companies was just horrific.

You know, we're hoping to see that change, you know, hopefully soon. Obviously, execution risk. Not only our execution risk, but obviously our portfolio companies have to execute. This distribution gap that we're looking to solve is probably the biggest worry I have. I'm not too worried about AI execution risk. We're already seeing those tools work for us. With regard to clinical and regulatory risk, those are always something to be faced with all the life science companies we're involved with. The path forward is pretty straightforward. We're now positioned to launch 3-5 high-quality companies a year.

You know, again, that's gonna depend a lot on our distribution and how we, you know, how we can build that. We've got a lot of, you know, we've talked about in the past, we're doing a lot of things and partnering with other distribution partners, and so we're hoping to make that happen, you know, in addition to what we're doing with spinning out the clearing platform. We're obviously gonna, you know, spin out PatentVest as well and monetize that. This, you know, cost scale efficiency improvement, I think is only getting better as we get better at what we're doing. As always, you know, shareholders retain preferred access to MDB deals. I wanna thank you all for having faith in what we're doing here at MDB.

You know, it's been a really tough couple years for us, watching our stock go down for the last, you know, last couple years since we took this company public. So I'm gonna use that for a second here to editorialize for one second. I know I've ran a bit over, you know, on this presentation. We're up to 37 minutes, but I'm gonna try and make this as quick as possible. You know, we've had a lot of people that have stuck in there, but a lot of people have sold our stock or the stock wouldn't have gone down.

I think a lot of people have been disheartened, and I think part of, you know, what I will take credit for is this was a lot harder than we originally thought to get up and going. You know, I could use the market backdrop as an excuse, but the reality was, is that we thought we had it in the bag. You know, when you looked at the batch of companies we launched right before we went public, all of them went to billion-dollar valuations. You know, if that had happened after we were public with our current batch, you know, we would not be having this conversation right now.

I think that, you know, a lot of our investors were like, "Well, you know, yeah, you got lucky with Prevention. One of the drugs worked and it sold." You know, how much were you really involved? Well, the reality was, we started that company. Those assets wouldn't have been licensed. There wouldn't have been, in my mind, that opportunity, and certainly not in a public realm, hadn't we been able to, you know, to help make that happen. You know, if you look at Post BioSciences, you know, investors have had, you know, it still trades, I think, for a $1.5 billion valuation or so, maybe close to $2 billion. I don't know where it's at right now.

Investors have had multiple opportunities to make many multiples of their you know of their investment from where we took that public. Even when you look at the most challenging one, which was Q BioMed, this company you know achieved a billion-dollar valuation on the promise. The technology worked, but it also highlights the difficult parts of what we do, which is you know the company's gotta execute. In that technology, we haven't given up on it. We still think the technology is brilliant and it should be you know broadly available to patients. It's you know it's had some challenges. When I look at the current batch of companies that we have here today, when you look at all four of the principal assets we have, I really believe all those have billion-dollar potential capability.

You know, obviously, if all of them hit $1 billion, we, you know, it would be, you know, crazy return to shareholders. I'm not saying that's gonna happen, and I don't expect it to happen. It would not surprise me if any one of them hit a billion-dollar valuation. I think that when you couple that with the pipeline of things that we see that we have coming, it seems inconceivable to me that we're not gonna find one of these companies to hit a billion-dollar valuation again and reward shareholders. Again, it's not a promise, it's with all the caveats, but that's the way we're seeing things and why we're excited. With that, I'm gonna open it up to questions. I think, George, why don't you come back on-

Yeah. Let's just jump into it. If you have a question, you get into the Q&A down at the bottom. Just scroll over the mouse, and you can type a question in there. I'm gonna start right off. Chris, I know you hit the positions we have the biggest stake in, but I just got a question on, you know, can you talk a little bit about Q, ClearSign, and Beat? Then also a question on Buda. You know, that was unusual for us to do Buda. Can you just, you know, give a little bit of view on those positions that many of our shareholders still hold?

ClearSign is, you know, certainly been on that long commercialization journey, and that's a company that Anthony knows much better than me. You know, from the perspective, and it's a very small position within our firm. You know, they have been on this commercialization journey, and their unique burner technology is more relevant than ever. We're gonna be burning a lot more natural gas and so I think that company is scaling. You know, I still think the prospects for that company are quite good. With regard to HeartBeam did something that most people thought was impossible, to get an FDA approval for a 12, you know, pocket 12-lead ECG.

You know, what's not told in that story is that that ECG is even better than a 12-lead in many ways. You know, as they've signaled, could be the first device to be able to detect a heart attack, which is a game changer, would save millions of lives. The commercialization journey is not easy for any of these small, you know, companies. HeartBeam, we're still super. You know, we think everybody in the ECG space or health monitoring space, AI space should wanna partner with HeartBeam because they have the most sensitive ambulatory ECG on the planet, period, end of story.

You know, we're very hopeful that the team is gonna execute on making sure one of those partnerships happen, which will bring scale to a really unbelievable technology that could save millions of lives. Buda. You know, I addressed it in the shareholder letter. You can look at it. Buda, everyone said, "Well, geez, why are you going away from deep tech or what have you?" Well, it was a bit serendipitous because a friend of mine really was the CEO of the company, and he was visiting me in Nicaragua.

We were sitting around, and he said, "Well, here's what I'm doing." I said, "My God, you're building a whole new category in a category that's gonna be everything." When you look at, you know, Buda, they're they have the opportunity to be not only the fresh juice leader, which is not, you know, widely known as, you know, you can't really buy fresh juice, you know, at scale in most markets like Walmart and Kroger across the country. This fresh movement is going big. Now ever since, you know, we started the thing, man, every one of these markets need a fresh element because all the shelf-stable processed foods are all gonna get shipped by Amazon. Quite frankly, everything's going against processed foods.

It was the opportunity to basically participate in what could be one of the biggest global shifts we've seen. Anybody that's shopped at markets in Europe knows that, you know, you're not. People go shopping, you know, couple times a week 'cause they want fresh. They don't want. They're not eating preservative foods and, you know, for the most part in Europe. This is a massive, huge opportunity, and we saw an opportunity to bring that to our community. It's a unique company that could be the leader in a space, and it happens to be profitable. We're super excited about it. What else did I miss?

Q BioMed.

Cue. Cue is struggling. You know, I think they've struggled, you know, putting together a cohesive management and board and getting that technology commercialization. That being said, they partnered with Boehringer Ingelheim and also partnered with ImmunoScape on CUE-101, and now they're about ready to put CUE-401 in the clinic. All of these are massive game changer type opportunities. The stock doesn't reflect it. You'd never guess by looking at the stock that it has any value. In fact, we believe that all three of those opportunities, those shots on goal are super valuable. We're, you know, we're really, you know, we're still just as bullish about the technology as we've ever been.

You know, they've had their challenges in getting the execution side of it done.

A question on moving on to eXoZymes in that conference call. We're gonna jump right off this call and go right into eXoZymes's year-end call here that starts in 15 minutes, so we'll wrap up before that. What are you looking at for—obviously, they're gonna have to raise money. What's the dilution gonna look like in your mind? I'm getting a question on how do you think the dilution works, and how does that work when you're looking at an asymmetrical opportunity?

Yeah. The great thing about eXoZymes is that, again, much like if you think about MDB at a $10 million OpEx level to create big opportunities, eXoZymes is the same way. eXoZymes has about $10 million in OpEx to create huge opportunities. Now they've created two gargantuan opportunities in NCT and cannabinoids. You know, they're gonna talk all about that, so I won't go into it too deeply. The combination of government grants and now that those opportunities being on the doorstep of commercialization, these aren't science projects anymore. Dilution is gonna be relatively minimal in our mind because this is not like putting drugs in clinical trials. This is not, you know, they can outsource manufacturing. It is super capital efficient.

We've worked really hard, and they've worked really hard to create a high impact organization to focus on big, huge platforms where they can generate, you know, you know, we're talking about TAMS in the hundreds of billions with the two platforms they're in. They have the ability to be a major player in those platforms with a relatively small operating budget, which really speaks to how impactful their technology is. The reality is nobody believed they could do it. Nobody believed it would scale. I would just tell you, throw all your best scientists at it, go visit the company, go see where they're at, and you're gonna see that this could be the biomanufacturing. This could really be the start of a huge biomanufacturing revolution.

In fact, you know, the U.S. government, you know, we can't continue to outsource manufacturing, especially pharma and you know, and nutritional supplement, you know, manufacturing overseas. This is a huge initiative. I think you're gonna see continued government grants coming to them. I just think that it's in the right place at the right time. Now we just gotta go out and tell the story.

Question on PatentVest. How systematically or, you know, structurally, how do you see that spin out? If I'm a shareholder of MDB, how's that gonna impact me? Do you have an idea what that path is on, you know, valuation and spin out? I know you said you weren't really sure about what the valuation was gonna be. But if I own a share of stock, what am I gonna see as a shareholder?

Well, the good news about both the clearing, you know, MDB Direct, the clearing ops and PatentVest is we own 100% of both of them. So, you know, we're starting with a much larger share of those than we do with the other companies we have ownership in. our objective is to do a round of financing to bring in partners. we wanna bring in, you know, folks, can't mention names, whether it be law firms, big corporate strategics or other strategics, and we're talking to, you know, various strategics right now. Our goal is to get that funded and out of MDB as a company.

We're gonna look forward to taking it public in 2027, and then, you know, the method in which we do that and how we do it is not really completely formulated yet. That's gonna be largely dictated by, you know, what we do on the partnering front here in the short run in funding it as its own independent division here shortly.

Can you talk a little bit about what your deal pipeline looks going forward in the next 12-24 months?

You know, it's really interesting because, you know, the deal pipeline is great. I can only see it getting better. You know, the biggest point is really our ability to get them sold, right? We have to get them packaged and sold. You know, right now with, you know, where we're at, you know, the biggest constraint isn't the number of companies we're seeing. It's really gonna be to work out the distribution side of the equation and get that done. I think once we do that, you know, who knows how many we can do a year. Like you said, the biggest issue is solving the distribution thing.

Obviously, our stocks, you know, some have done okay, some haven't, you know, haven't done as good as we hoped. You know, obviously, if a couple of them work out pretty good, then that puts wind in the sails of everybody. We really need to add incremental distribution. Our community is still relatively small. While we have a couple thousand shareholders, we only have 675 active accounts, so it's still very small. You know, we're trying to broaden distribution so that we don't have, you know, a couple of really large investors in our deals. We're trying to broaden that a bit. As we do that, then, you know, our ability to get more of them done is gonna increase.

You know, I'm not worried about the number of companies that we can launch. I'm worried about just making sure that we can find investors for them all, so.

Okay. I got a question here that's, it's a good question, but I'm just gonna read it. I normally paraphrase, but would or have you considered a SaaS model for PatentVest that in turn for its analysis? This would serve not only to generate revenue, but attract IP contribution to increase IP content to evaluate the combination of IP to uncover unexplored opportunities.

Yeah. I think to be 100% blunt, I think SaaS is gonna be crushed by AI.

Go into that a little bit. How, why do you think that?

Just to give you one segment that's a really, really big core thing of what we do. Let's take patentability, which is what is largely called prior art search, right? Any new inventor that comes up with a new idea wants to do a patentability or should do a patentability analysis. Here at PatentVest, you would maybe if you were, you know, subscribe to a patent database, you would go out, you would do your own patentability, you know, analysis and search. You would, you know, maybe pay PatSnap $10,000 or $12,000 a year or $15,000 a year to go do that. It would kinda get you part of the way there, maybe, right? You'd kinda...

You'd get a lot of data, and you'd say, "Well, you know, maybe this works." An expert user would use PatSnap and maybe five or six other databases and then get to a really, really good patentability, but very few people did it 'cause it was too expensive and too time-consuming. We've now just to give you an idea, what we were doing is we had expert-trained analysts in Latin America with PhDs and, you know, master's degrees in science. They would do a patentability analysis in 45 hours. Now, even though the cost was lower by doing it in Latin America, 45 hours is still a huge amount of inertia to actually go through and actually do that work.

We took the same SOPs for doing a patentability analysis, now run by that same expert analyst that we have in Latin America with AI, where we basically programmed the agent. We programmed the agent ourselves with an AI, you know, popular AI vendor, where the software needed to run that analysis was completely done in-house without a software developer, mind you. Okay? We can now do that patentability analysis with our expert patent searcher in an hour and a half, and it's better. That's today. We're doing that right now. I'm telling you, it's gonna completely change the SaaS business. These folks that are out there building AI solutions, you know, curated AI solutions, I think they're gonna...

I'm very skeptical of the value of them because we're building them with off-the-shelf AI solutions today with our own people. They're not even software developers. The curated data that we have, that we've invested in for all these years is super valuable now 'cause it's gotta be done behind a wall, right? We don't think that people should be putting their investments or their inventions into ChatGPT and doing this. That gives you a reason why I think SaaS is gonna be. I think human-in-the-loop IP development is the future, and we have a shot to be the leader in it because we're an ABS firm, because we have attorney-client privilege, because we have the ability to basically turn this into a unified business process. I don't see it as a SaaS business going forward.

Okay. Well, we're at the end here and I'm gonna go ahead and turn it back to you and let you go ahead and close it out.

All I can say is thanks. It's been a very, you know, tough road the last couple years since we've been public. I hope that by listening to, you know, where we see things going, that you have a bit more enthusiasm and you have the ability to kinda keep the faith and hang in there. We're super excited about the future for the firm. We're getting better and better every day. The entire team here is working their ass off to make things happen. It's been a rough thing. We haven't given people raises. We've taken back RSUs. We've really backtracked a lot, and a lot of the expectations that we had for ourselves were not met.

You just don't give up. You never say die. You just keep going and I appreciate everybody at the firm that's done it. It's not been easy. It's been a lot of really difficult discussions. That being said, when I look at what's bubbling up from what we have, I'm super excited. I'll leave it at that. George?

Oh, you want me to make the ending note? Well, thank you, everybody, for coming. Tony, that was your job. You're supposed to jump on there, close it out, start it, close it out.

That's all right. I'm ready to do it. We'll say, thank you very much for attending today's presentation. This will conclude our conference call.

All right. Thank you, guys. Appreciate it.

Bye.

Welcome everyone to the MDB Capital Holdings' Third Quarter 2025 Update Conference Call. Thanks so much for joining us today. [Operator Instructions] Before we begin, the formal presentation, I'd like to remind everyone of several important things. Today's conference call is being recorded. [Operator Instructions] Please remember that statements made on this call and webcast may contain provisions, estimates or other information that might be considered forward looking. While these forward-looking statements represent our current judgment on what the future holds, they're subject to risks and uncertainties that could cause actual results to differ materially. You're cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Also, please be aware that we're not obligating ourselves to revise or publicly release results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we'll attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-Q for a more complete discussion on these and other risks, particularly under the heading Risk Factors. A press release detailing these results, which crossed the wire this afternoon is available in the Investor Relations section of our website, mdb.com. A replay of this call will also be available later on mdb.com. Your host today is Chris Marlett, Chief Executive Officer and Co-Founder of MDB Capital Holdings. He'll be joined later by George Brandon, MDB President and Head of Community Development. Chris will lead an update on the Third Quarter ending September 30, 2025. At this time, I'd like to turn the call over to Chris Marlett.

Thanks, Tony. Well, welcome, everyone. Thanks for joining today. I saw it was a pretty crazy day in the market. And so it's been a really interesting period in time to navigate these markets. And I just want to thank all of you that have been supporting us and getting behind us, and we've had a really good last few months as our platform takes shape and as our pipeline builds. And so we're very enthusiastic despite all of the backdrop of uncertainty. So well, one of the things I wanted to do today was talk a little -- do a little bit of a different approach to try and help to explain what we do at MDB, why we create value or how we create value and why we went public because I want to remind everybody that we did this for a very specific reason. And there was a big why, if you will, why we went public. But I also want to recognize that so many of you that have believed in us have lived through the stock really going down. And while the stock is down, we've lived through so many different markets before. And sometimes, when you call me where I talk to some of our shareholders, they think that I'm not too worried about things. One, I'm not super worried, but I don't like the stock being down either. So we really are in this together. But I want to also reiterate that we're not changing what we do just because the market's down. What we've done for a long time has worked, and we think it's going to work again despite the fact that times are changing. There's a lot -- fewer small public companies out there. The small public company market has not been really great. And so we're just as excited as we've ever been, even though things are not unbelievable with our stock at this point. So the last, I would say, 2 years has been very challenging because we've had this great historical success, but it's certainly not reflected in the stock today. We've had 28 years of launching big ideas. And we've had really it's an incredible record that really no other firm has really matched. We've never failed at doing an IPO. There's been times that were super tough to get them done. There's good times, there's bad times, but we've been -- we've -- 100% of them we've ever tried, we've done. And amazingly, of all of our IPOs, 100% of them have traded at 2x the IPO price at some point post IPO. So that means that these companies got public. They did well. They had a chance to raise money. They don't all win forever, but we did what we were supposed to do was really launch these companies that have big potential. And so many of them have reached real significance as far as valuation. And I want to remind everybody that we've published sort of a historical perspective of those companies we've launched in the public markets. So we can remind everybody that this can work. And I think that what's wondering -- what's I think lingering in everyone's mind is the whole concept of, is public venture dead? And I think that I'm super excited because I think we're in sort of a whole new beginning for public venture. And I couldn't be more excited about what we have ahead. And again, reminding everybody why we went public. We really -- for 28 years, we only launched what was at 17 companies, so about one company every 18 months. And it was really -- I think a lot of you saw was sort of a founder-led operation led by me and our team. But quite frankly, people look to me for whether or not they should buy or sell something. And that was not something I look forward to, and I really felt like our results have proven themselves and it could be scaled. But we were really constrained by operational bandwidth. So the funding that we did for the IPO was really to put in a team to be able to scale this operation. And so it's been a proven model, but the big question has been, can we scale. And we really -- our goal is to get to 3 to 5 launches per year, which enables people to build a public venture portfolio because buying one company here or there is not really a strategy. It's just -- we're kind of deal salesmen as opposed to helping people to really build a diversified portfolio in public venture. And by doing that, we can bring our impact and our process to more and more companies. So I think the mission is always to build this operational framework, to make this sustainable and a long-term business that survives beyond the initial founders of MDB. And so that is our mission. We're sticking to it. And I think we're making great progress that I think will become very evident very soon. So simply what we've done, and I've talked to this in the past, is really we curate by looking through thousands of ideas. It does take looking through thousands of ideas to find ones that have that asymmetric profile that we believe is so important. And the reason why we've been able to do what we've done historically, you can't just episodically stumble across things. You have to really get out there and our team has done a great job of getting out there and looking through thousands of ideas. I know a lot of you that bring ideas to us get a bit disappointed sometimes because there's such a small percentage of the things that we actually end up getting behind, but we say just keep bringing them sooner or later, you're going to get better at finding one, and we really appreciate all of the companies that are brought to us by our community. It really is an important part of it. And I would tell you that a very high percentage of the things we do are actually brought to us by our community as opposed to us going out and finding them. Then we position them for success, and that's really the hard work, once we curate them, which is equally hard, but positioning them for success and being able to live in the public markets is really where the platform is really been built. And I'll talk to more of that later in the presentation. But I don't think that, that's really apparent to most shareholders today. I don't think that they really understand what we've built and why we have something that really nobody else has. And then, of course, launching them is the things that you see, which is really when they're ready to go public and trade in the public market. So what for the new people in the community that don't really know public venture. It's really this explosive growth potential of venture stage companies and bringing that public market liquidity and transparency that we now call public venture. We used to have an old tagline that we're bringing back, which I think is really something that we forgot about and really is important to understand what the value that we think that we bring in MDB is that we really see value others don't. Most of these opportunities would not be opportunities to any other firm. And I think that our ability to create value from those is really completely unique and not something that these entrepreneurs and inventors can just find anywhere. So it's this -- it's really this transformative magic of transforming these early-stage big ideas into investable public companies with $1 billion-plus potential. And I think that we've really thought about what it is that we do that adds value so that people understand how we actually earn these equity positions or are able to make this a business. When things come to us, they typically are really exciting, big ideas, but they're really underdeveloped without a clear commercial path. And they don't have an IP strategy or a protective moat around them that's completed. And it's kind of a bit unfocused because it's still early, but can be developed. And as a result, they have limited access to growth capital. And after we're done and they're ready for launch, they really have a clear mission as a new category leader, not to say that it doesn't pivot after they're public. It doesn't mean that it's 100% fully baked as a company, but they're really going to be a leader in a particular technology or business category. And they have a comprehensive IP strategy in a protective moat that we're experts now at making happen. And they really are differentiated and they're public ready for the public markets. And so these companies trade and are valued in the public markets as evidenced by our track record. And when they walked in our door, they really didn't have that capability. So I think that, that's what's exciting about what we do and how we create value for shareholders. And talk a little bit about what were -- that underpinning or that foundation for that is really this these integrated components that stand underneath this whole strategy. And I think that when we first went public, we didn't do a good job of communicating. I think a lot of people really believed that we were operating multiple businesses when really -- it's really one business to support this sort of launch of these public venture companies, stage companies. And it's really the foundation that enables us to provide this value that really nobody else can because there's really no PE firm or VC or underwriter that's built to do what we can do. There's -- we are completely unique, and I would say that, that leadership is clear in this category because just like the companies we're launching, this category of public venture there's -- we don't really believe we have any real competition. And so when you look at all of the services, and again, the -- I'll let you guys read this at a later date, but really, all of the things that we do, you do not find at an underwriter or a VC. And ultimately, why I think this is going to be super important. It's not just the companies that we find in academia that might have a great new technology that we have to formulate into a company, but it's also companies that are more developed like you would see with Buda Juice that we'll be soon during the IPO for, where we really help them to really go public, I mean, and be a leader because quite frankly, they can't just walk into an underwriter, and we provide all these services that enable them to get to that public offering much faster. And so we say 2 to 3x faster, that's hard to really quantify. That's just sort of what we believe. But we can take something like Buda Juice from a very early-stage company that didn't think they can go public. And in 6 to 9 months, really get it ready for going public and have it be super well in demand as a result of positioning it correctly. And so I think that's a big part of what we do. The other part of it is that a lot of times these companies are told it's going to cost you $2 million to go public. And that's just not our reality. We have -- whether it's law firms, accounting firms, et cetera, we have the resources to be able to take these companies public for their total all-in cost for going public outside of underwriting fees is usually less than $0.5 million, which is not something that most people or most entrepreneurs fully understand I think that they -- again, there's big misconceptions about what it costs to go public and et cetera. So to remind you how we create value, it's a combination of the fees and equity that is how the shareholders of MDB make money. And so when we transform these companies, there's some companies like in eXoZymes, which we cofounded effectively with the inventors from UCLA, we have to really work hard to position that company and develop that company from putting together the whole team, the strategy, the IP, et cetera, and that's a very time-intensive process. And those companies, we have more equity in a lot of cases, in the case of eXoZymes, we put also $5 million in capital into the company. Other companies like Buda Juice that you'll see, we'll have underwriters warrants and we'll have underwriting fees. And that -- we don't have as big underwriting -- of equity position, but we also didn't spend as much time, effort and capital to get behind it. It was a very different type of situation. But in all cases, with every company that we end up launching into the public markets, we will have an equity component because we want to bet alongside of our investors. We want to make sure that we're completely aligned with investors at all time and we're never going to be a fee-for-service -- traditional fee-for-service shop because we add too much value with this platform to just charge an underwriting fee like many underwriters. So I know there's a lot of confusion in the marketplace with that because everyone is a little bit different. But it's really just a function of how much time and effort it is to do it. And most importantly, it's making sure that we curate something for our investor community that works. That's always the way we think is, it's, number one, it's got to work, and number two, we have to be compensated fairly for what we're doing. And it's what I love about what we're doing now is that we have a lot of flexibility about the big ideas we can launch. But again, what always stays the same is our category-leading companies, whether it's a technology category or a business category like what we're doing with Buda Juice. So our goal from an operating perspective, and I've talked to you before, we have about $10 million in operating expenses, which is really -- in effect, our operating platform is really seed capital for the companies we're starting and launching because we're investing our time and effort to really position these companies for leadership, and that's really an investment in these companies. And I don't think, again, I don't believe that that's well understood. Even some of our biggest investors they say, well, geez, why do you guys get such a big equity position in some of these things. I said because we're providing the value. And I think that a lot of our co-founders and what have you, if you talk to the co-founders, a lot of these companies, I think that every one of these companies that we've launched and have taken public, I'm not so sure they could have gotten public without us. I'm not sure that they would have been public without us. And so I think that, that's where that transformation on the value creation is so evident. So scale is the issue for us. Obviously, the big difficult lift here is operationally how do we take one every 18 months to get to 3 to 5 year. Well, I really don't believe that the curation is our choke point. What we're seeing as far as opportunities are concerned, we have now a very deep pipeline of opportunities. So I'm not really worried about finding enough opportunities. In fact, even though we are going to be doing more companies, I believe that every one of the ones we launch going forward have a better probability of success than the ones we've done historically. And that's a big statement, and I really believe it comes from the fact that we are now -- we've broadened our team to be able to curate more and effectively analyze more, but I also believe we're just better at picking because we've made every mistake in the book. We've created dysfunctional boards, management teams. We've picked the wrong business strategies. We've picked companies that were -- that went public too early. We've -- like I said, we've made every mistake in the book historically, and I can tell you the one thing that we're all acutely aware of is we don't want to make those mistakes over again. The other major -- so the biggest part -- there's 2 -- really 2 big things that really dictate how many of these we can launch on an annual basis. One is our process because it's really standing up those companies and getting them ready to go public, everything from developing their business and IP strategy, but also getting the narrative and getting the team right, those are hard to do. And that's where the community is so important and we want to broaden our community because the bigger our community is, the bigger the influences, the easier it is to put these companies together. We want to be able to lean on our community more to help us find CEOs, board members potential joint venture partners for these companies. And so that community is critical to that process. But also the community is important from the perspective of really investing in these companies. And I think that in good times, it's much easier. We found sometimes in good times, we send an e-mail and we've got 3x over demand for an IPO. In bad times, you call your friends and they cringe when they see the color ID, right? So it's very cyclical depending upon the markets. But we've managed to continue to grow that community and work on that because we know that the more the people are exposed to public venture relative to all the things they can invest in that it just makes sense. And so we just have to continue to build it. George is doing a great job in the team and Tony and all the rest of the guys that are part of the whole community team. They're doing a great job. And every day, we're out there making new friends and it's really quite fun and we're seeing great progress on that front. So I think that's becoming evident as we're seeing the pace really pick up. And I think that we're excited because for the first time really in our history, we're going to be closing -- well, highly likely to be closing. We've received all the funds for Paulex and we'll be announcing the closing on that here shortly. And then Buda Juice, we expect to be priced here in the next couple of weeks, hopefully, if the SEC can hurry up and get back to work and get those comments in. So it will be the first time we've ever done 2 company launches in one quarter. So I'm pretty excited about that. But not just that, we've got a number of other companies in the pipeline, and I think we've got a very active calendar going into next year. So I think that there's 4 to 5 companies in late-stage negotiations. So I really believe we have a shot at making that 3 to 5 launches next year. I'm pretty excited about that. I also think the Microcap is going to make a major recurrence. I'm making a market call here because it's been such a horrible last few years for Microcap. But I'm making a market call that the transparency and liquidity that exists in the public markets is going to become a cool thing again. It was funny. I got a call from a very old friend in Indonesia, a very wealthy guy that has businesses in Indonesia. And he called me up and he said, Chris, I want to go to NASDAQ. And I said, well, why do you want to go to NASDAQ? And he goes, well, he goes in Indonesia, he goes, if I take my company public, I'll trade 10x earnings. He goes on NASDAQ I'll trade 40x earnings. And I was like that's pretty profound. Well, I think that, that's what you're seeing start to have happen is there are so few companies on NASDAQ now, these small companies that have any kind of revenue and earnings that are in the Microcap space are very highly demand. There's very few companies left in the U.S., ironically. So many of them are going to private equity route, the VC route, the PE route. And now you can talk to all the family offices and what have you. Nobody wants to allocate to that sector. But where can they get price transparency, liquidity, et cetera, it's public markets. And so I'm a huge believer that we're probably on the doorstep of really this taking off in a major way and I couldn't be more excited about being in the business at this time. So the third quarter financial update is pretty straightforward. Our goals, as I mentioned, are really to offset our operating expenses with financings. So we've used about $5.9 million for the first 3 quarters. We'll have a fair bit of revenue in the fourth quarter that will send that in the other direction for the balance of the year. And so I expect that we'll have a good fourth quarter, and we'll start to see that we're -- our OpEx are starting to get covered by the number of finances we're doing. In addition, more importantly, we're going to have important equity positions in Paulex Bio and Buda Juice that really give us, all of our shareholders' big equity upside going forward. And as always, we're trying to be very cautious with our OpEx and making sure that every dollar counts. And the team has done a great job. There's been -- the team has really dug in, working hard. I mean everybody on the team is been committed, and it's been a tough slog guys. It's been really tough, but we have a great group of people all across the organization. Everybody is really -- I couldn't be more pleased with everyone's commitment, and we have an unbelievable team as many of you know. And I think that we have significant equity holdings that are really unrecognized in our stock price, which I'll talk about in a little bit. So when you look about -- look at our stock being undervalued, if you take the eXoZymes position, the HeartBeam position and our cash, the market value is significantly higher than the market value of our stock right now. And that comes from, I think, people just being worried that, in fact, maybe public venture is dead, maybe MDB lost their touch and they can't figure it out how to navigate through this market, what have you. It's a commentary that I'm not proud of, but having lived through lots of cycles, I know that it can change and be on the other side of the equation, and we can be trading at a premium to our equity value. So I don't take it personally, but it does hurt because I know a lot of you bought the stock at higher prices. And we're trying to rectify that as fast as possible. And I can tell you the team has dug in to make sure that, that happens. But some things that aren't valued in the stock prices is really patent, which were we've made the decision to spin it out, and I'm super excited about having the first -- potentially, the first public law firm in the United States, and it couldn't be in a better sector, which is patent law, which is a federal practice. We'll talk a little more about it in the future, but I do believe that is an undervalued asset that's not valued at all on our balance sheet right now. And the other thing is we've been contacted by a number of people that want to be in the clearing business or associated with the clearing firm. And so I think there's a lot of potential value in our clearing platform as we move it forward. And so those are 2 assets that I think have significant value that can even be -- we can realize some real significant value. But I want to talk -- touch on a couple of the companies that many of you own stock in and of course, MDB owns a lot of stock in, which is eXoZymes and HeartBeam. I couldn't be more proud of the accomplishments that those companies are making, albeit not necessarily 100% recognized in their stock prices, but eXoZymes is making unbelievable progress and their platform is really going to be transformative. And really, you're going to see this, I believe, in the very near future. that we're going to see a new paradigm in pharmaceutical development enabled by their synthetic biology platform. And you're going to see that in paradigm-changing companies that will get spun out of eXoZymes and we're hoping to -- that gets sort of unveiled here very shortly. It's been a long time coming, but I think we're very close to making that happen. And HeartBeam, it's been a tough road to get through the FDA. But hopefully, we're right on the verge of FDA approval and it's -- it really is a life-changing opportunity in health care in the sense that now you're going to basically have a virtual cardiologist in your pocket at all times. If people carry this around, they're going to be able to get a 12-lead ECG to their doctor or to a cardiologist instantly. What does that mean? That could save millions of lives, millions of lives. And it's never been done before. And I think that hopefully, this FDA approval gets through and we get this product launch because it's a game changer. And both these companies I'm super proud of and I'm super proud of our team for helping get these companies launched. It really is an exciting time, even though it's been a tough market. These are game-changing companies that we couldn't be more proud of. So just to reiterate, we closed 3 to 5 deals a year. We really cover our operating expenses. And then as you can see, the equity that we earn in a company that we cofounded with Francisco Leon, and Miguel, we own a significant part of that. We really helped put together the license at Mount Sinai, and it's been a lot of hard work, but I really want to thank all of our investors that believed in us to get behind the launch of what could be a really game-changing company. So it was a long time coming. But again, it was the fortitude of our team and the belief from our investors that are making that launch possible. And I want to thank everybody that participated in. So really in summing up, I think that I want to remind everybody, we really have, in my mind, the only real public venture platform. And we have such a unique team of people. We have such a unique process that I believe is going to give life to lots of meaningful companies. And by being a shareholder, Obviously, in tough markets, it doesn't really matter that you have access to the deals. A lot of people have access to the deals. But in a better market, like I think is coming along, as a shareholder, you're going to have preferred access to each one of these opportunities to invest in. That's, I believe, an important reason to own MDB. And again, our proven execution historically, and I think our momentum is a great reason to start thinking about owning the stock if you don't own the stock already. And we have a lot of hidden value. Our economics are scaling as we get more companies through the pipeline. And I think we really have a moat around our business. They're just, I think, we are in a class unto ourselves in what we do. And so I think that, that gets recognized by companies looking to go public or looking to be positioned as a market leader. And I think that the timing couldn't be better to be a shareholder. I think that hopefully, we're seeing some shifts in the marketplace and people coming back into public venture. So as Tony said, our model has proven, the machine is scaling and the window is opening. So with that, I want to thank everybody and open it up for questions.

[Operator Instructions] And at this point, I'd like to welcome George Brandon, MDB's President and Head of Community, who will facilitate the Q&A session. So George, welcome and take it away.

Okay. Chris, first question you're going to get it on every conference call. Can you give a little bit of your philosophy on when shareholders could expect to see a dividend, a little of your philosophy on eXoZymes. Obviously, that's performing really well. When would you think we would -- there would be a distribution? What's your philosophy there?

Yes, philosophy is we want to see that the company is out and really there's a developed market for the stock. And we don't want a dividend to get in the way of the development of the company. And so right now, the volume is pretty low in eXoZymes and what have you. And I think it's really just a matter of once the company's business model and execution is really clear. There's a broader market for the stock. It would make sense to do a distribution. And so I can't make any predictions, but I think our philosophy is to make those distributions when the company is broader ownership and more trading volume.

So a question to follow up on that. If -- as Obviously, eXoZymes is going to be raising money. However, they're going to do that, whether it's a spinout or a new technology. Do we expect MDB, do our shareholders expect to retain the same percentage of ownership as they raise funds? Or how do you see that working out?

No, any time you buy a public venture company, they're going to need to raise more capital. and we as shareholders are going to be diluted. Obviously, the better the company does, the less dilution that we suffer. But yes, there's always dilution as companies raise more money and -- but we always work to make sure it's as little as possible.

Let's move over to HeartBeam. Look, we're hoping, as they've said on their conference call, they expect to get FDA approval you can look at their balance sheets, how much cash to have. How do you see that playing out, and what do you see MDB's role in and around that? We certainly have right of reverse refusal on funding, just a question on that.

No. Listen, I think I think that the philosophy of the Board of the companies has been -- we have to be able to tell people what's going to happen with the FDA before we do raise more money. And I think that, obviously, the FDA is dragged out a little bit longer. But I think we're hopefully at the finish line here. And after you take the uncertainty of FDA approval will be the first 12 lead, first carrying your pocket 12-lead device ever approved by the FDA, which people understandably are skeptical that, that would happen. And so I think, hopefully, that happens. And then I think we take that off the table. And now it's just makes it a lot easier for an investor to make a decision whether they want to invest or not.

Got it. Look, we did a whole slide on kind of why I think the stock is where it's at and what's in the portfolio. But the question is, hey, look, we talk about creating value. For those that did the IPO at 12, we're down here in 340 or so. What's your thought on why we're trading where we're at. And I know this is just -- you don't have a crystal ball. You can't see into the hearts of those who own your shares. What's you're kind of -- doing this for a long time, what -- if you were to summarize that -- those reasons, what would they be?

Well, I think that the #1 reason is the market for Microcap has been pretty bad. There haven't been -- hasn't been a great space. That's probably the #1 reason. Number 2 reason is that people are -- because of that, people are saying, well, does MDB lost it? Do they have the ability to pick good stuff anymore. Do they matter anymore? And that's a totally legitimate thing. I think the other part of it is now we're getting into -- you're tax selling and people can sell stock and offset their NVIDIA gains with their MDB losses, right? And so I think there's bound to be some tax loss selling. And I think it's -- every one of these companies that we quasi modeled ourselves after at some -- they went -- they would trade from big discounts to big premiums depending upon how people felt about the company at the time. So one of the great companies in the public venture launch business was Safeguard Scientifics back in the '90s, and they would go from trading at a discount to trading at a premium of their liquidation value pretty regularly. And that's just -- it's kind of like a holding, sometimes you get a holding company discount, sometimes you get a holding company premium just purely based on how people feel about you at the time.

Yes. Here's a question on -- you made comments on you're bullish on the Microcap market. Certainly, I'm out there. I was at a conference with Keiretsu yesterday in Philadelphia. A number of the companies basically pushed back ongoing public early as the expenses of that. You talked about it a little bit more. Can you give a little bit more color of what makes you think that, that the cost of being public, whether accounting and legal, regulatory, is trending in a way that's positive for more listings.

Well, I think that it all comes down to how they're valued in the market. So right now, the companies that are profitable and growing in the Microcap sector are trading at big valuations. They're trading at last time we looked 1.15 PEG ratio. So if they're growing at 35%, they're going to be -- or 30%, they're going to be trading at 35 or so times earnings. And that's higher than what private equity firms are going to pay or and so it just makes sense for them to go public to raise additional capital and -- or if shareholders need liquidity or what have you. So we see it as that -- and there's very few of them out there when we did the screen of companies making a $1 million or more, growing at more than 10% and under $300 million in market value there was 34 companies. If you screen for foreign companies, we just did a foreign screen, and we had like 4,000 companies that fit that. And that's why a lot of these companies are going to want to come to NASDAQ. And they are you're going to see I think a delusion of these companies coming to NASDAQ. And I think we also have an opportunity to find some leaders in foreign markets that want to come public in the U.S. The other aspect of it is what's happened in the private equity, private debt and VC markets has been really amazing to watch. If you look at VC activity today, the big VCs, what are they doing? They're funding these big unicorn AI companies, they're putting in $100 million at a $5 billion valuation. And they're not doing anything like -- they're not putting $3 million or $4 million in a promising medical device or a biotech company right now. And even the ones the big VCs that are still doing the life sciences, they're writing $100 million checks for these opportunities, which we think is just crazy because we don't think that writing a $100 million check for an early-stage company makes a lot of sense. And I think that that's shown in the performance of these funds. And so I think that the investors are not going to be funding these funds much more, whether it be private equity, private debt, what have you, these things, we're now seeing in the private debt market. Companies that they had their debt marked at par. And next day, it's 0. And if you have publicly-traded debt today, you get marked every day. And I think that investors don't want -- they want the transparency and liquidity. I'm in these -- I'm in one of these men's kind of networking groups where we talk about investments. And if you were -- in these groups 2 years ago, they were all talking about these private equity deals we're getting into, I can get you into it, what have you. I can tell you right now, they're not talking about it at all, and you've been going to the Angel conferences and nobody wants to put money in private deals anymore. So I think that -- I think we're going to see a dilution of companies who want to go public. And it's just -- we couldn't be better positioned.

So little -- look, I think a little confusion in our history has been big ideas, mostly deep tech. We're still looking at deep tech and doing deep tech technology, big ideas. But the comment here or the question is, but yet our next big idea is a juice company. And one of your questions are, are fruit juices popular now. Can you delineate a little bit. We've got the venture side, we're competing against venture using public venture. But then against private equity to take the best and the brightest from private equity, such as Buda because Buda had a bid from private equity, and we're taking that deal. Can you kind of delineate deep tech versus some of these private equity deals?

To be 100% transparent. I mean Buda was a friend -- the CEO is a friend, and he was telling me the story about his company. And we were paying out and sort of pulled together, and he's telling me about it, and he's considering you in private equity. And I said ratio, I think you're a leader of a new beverage category, right? Fresh juice is in less than 5% of markets in America for a reason, you're going to be able to bring this fresh juice to every supermarket in America. I said that's a new category. And anybody that's had pasteurized juice versus fresh juice knows the difference, right? And so it's a category leader, number one, if it's not a category leader, we are not taking it public. That's number one. It will never -- it's usually a technology category. Then you marry the management expertise at the Board level and at the investor level at Buda, these guys created fresh. There's a moat. There's a moat around it, right? These guys know how to do it. You're not going to see PepsiCo go into this business anytime soon. If they're going to go into it, they're probably going to go in it because they buy someone like Buda. So the guys that pioneered fresh, which is now going to be a monster category because anything that's not fresh you can buy from Amazon now. So the reality is that we're launching a category leader with a moat around it in our mind, okay? It's not an actual note like we have with IP with all of our deep tech companies. But there's going to be companies like that, that we can launch that belong in a public venture portfolio, somebody was real funny. There was another -- I won't name the name of the company, but there's another company going public in the, let's call it, the food category that is doing $200 million in revenue. It's backed by private equity type folks, but it's losing a lot of money, right? And it's going public at $1 billion valuation. It's big, right? And so we have a small company, no one thought, geez, these small companies shouldn't go public, but it's profitable. If it's profitable when it's small, just think what happens when it's big. It's like when it gets big, it's going to be even more profitable. And so it's an extraordinary business opportunity. And again, that's what we do is we curate these extraordinary leaders, and that's what our team is doing a great job of doing.

Yes. So these profitable companies, this question doesn't apply to it. But can you just give kind of a back of the envelope, when you do a big idea and what you've done in the past, how long it typically takes those companies after they've IPO-ed to establish themselves economically. What have we seeing?

Again, I encourage everyone to read the paper that kind of gives a back story on all the companies we've launched historically. But some of them developed very quickly. The stocks do very well quickly, depending upon if it's the -- it captures people's imagination right out of the chute. Some of them take longer. And it's just -- it's really tough to say. And a lot of the things we're doing in biotech, the valuation metrics have nothing to do with revenue. It's all around clinical development. And in some cases, it's revenue that will drive the valuation. But again, it's just -- it's the asymmetric returns that we're looking for. And I think we're old enough. You and I have been doing this for what, 40 years now. So we know when we see it. And we're -- we know what has asymmetric return potential, and we focus in on it.

I'm not so sure I know when I see it, which is why I'm asking the question, so I can't answer. So, can you give us some clarity on the PatentVest spinout? What timing one -- best as you can tell, what's the potential over time revenue-wise? And what kind of market value do you think we can see? And how has that been now going to look to shareholders?

I'm not going to make any predictions on market value, but I think it could be -- other than to say that it could be seriously substantial. And here's why. So currently, the practice of law, there is not a lawyer you will meet in any practice of law. That isn't completely concerned about how AI is going to have an impact on their business. I can tell you that everything we do from drafting contracts to getting advice now is happening realtime with AI. And I can tell you that law firms are going to have a big, big dent in their revenue line from AI. So when you think about the disruption that's going to occur and how the practice of law is going to change, it is going to be a massive disruption. And I don't think anybody really disagrees with that. The interesting part about what we did, either we were smart or we were lucky is by believing that the ABS program in Arizona might be a great way for nonlawyers to be in the practice of law to align our interest with the clients and specifically focus on IP law because IP law is -- IP prosecution about a $25 billion a year business. that has not been a great business for the major law firms. But it's a $25 billion of your business that is a federal practice. So whether it's litigation or patent prosecution, it's a federal practice. Why is that important? It's because the -- a lot of the states and the lawyers in these other states don't want to lose business to an ABS law firm. But because it's a federal practice, you can -- anyone can practice patent law in any state. So the reality is, is when you look at what ABS represents as an opportunity, when you marry AI and the ABS platform patent law is by far the best business to be in if you're going to be in Arizona with these ABS law firms. And in fact, now you've got people like KPMG and other major consulting firms figuring out, hey, we need to start an Arizona law firm. I can tell you that -- and then now you marry AI with this and our ability to take PatentVest and put Agentic technology or large language models on top of our existing patent data, we have the ability to provide unparalleled support for those, I call them in imprimatur attorneys. So now if you're an attorney that wins in the court room, you're an attorney that really knows patent strategy, you now have the ability to do what you do even better, more efficiently, more importantly, efficiently. So you could see a patent litigation, a patent litigation that would normally cost $10 million to get to trial costs $5 million if managed properly. What does that do? It completely changes the economics around litigation. It also changes the economics of whether a firm can take something on contingency or not and align their interest with their clients. That's a game changer. We are going to be at the forefront of that, and we're going to be a leader in making that happen in the field of IP law. And that's what's so exciting. And we're having discussions with, I would call it, these imprimatur lawyers that -- where they see the ability to partner with PatentVest or join PatentVest to basically participate in the disruption of patent law. And so it's a big, big deal.

Look, we got about 5 minutes here. And the questions are piling up. I'm not going to be able to get to all of them, but I'll try to answer them privately, if I can. I guess one of the questions here does MDB need more robust investor relations efforts to address enterprise stock given the value of eXoZymes and beat and the other positions in our portfolio. And...

Yes. I would tell you, yes is the answer, but it's not -- I think it's upon us to go tell the story more. So we've been heads down. We're not -- we don't have a very deep organization, people-wise, we're very efficient. And we've been really focused on just launching new companies and really keeping our heads down in a really difficult environment. And to some extent, I feel like you're pushing on a string when people don't want to buy Microcap stocks anyways. But I think that, yes, we need to get out and tell the story more broadly. We went to our first Microcap Conference, the LD conference -- LD Micro Conference. It was great. I went and saw people I haven't seen in 20 years. Unfortunately, the people buying Microcaps the average age was older than me. And so I think that a new generation of investors are going to start to get involved hopefully in this space. And I think that it was great. I got up and gave a presentation. We have, what, 20 one-on-one meetings, George and I did. It was great to talk to people, and I think we need to do more of that. Selectively, I do spend most of my time working with these companies to get them launched. But we do need to spend more time out talking to people. And Investor Relations, what I've found is have a great business, communicate it well and communicate it often. We're trying to do a better job of communicating it well. We're doing a better job of making it a good business. It's been a great business historically. It's been a really bad business the last few years, and communicating it often, we're working on so...

So we've got about 3 minutes here, Chris. But a question -- I get it a lot out there on really eXoZyme, we really thought that we would have a few deals in the bag here. And where we're at right now, and I know you feel very comfortable with the management there and where they're going and the opportunities. Can you talk a little bit about when you kind of, one, why you think it's taken longer than what we had originally anticipated? What was kind of the shift there? And two, why do you think it's -- we got a bright future ahead?

I think it was a pivot that probably wasn't communicated as clearly as it could have been. And the pivot was you're out talking to people that want to make new molecules in pharma and other businesses. And they can give you a fee-for-service business where they'll pay you some amount of money to get started and you can spend a lot of time talking to them. If you look at the other Symbio companies and provided services or enzymatic people like Codexis and others, the business models were pretty challenged. And we came to the conclusion that we can make molecules that other people can't. So is it a better business model to launch new companies based upon that? Or is it a better business model to do fee-for-service and try and get license fees from other people. And we decided it's better to launch companies that have a ton of value. So we have 2 platforms that we think we can launch out of eXoZymes that have $1 billion market value potential. So in other words, every company that we launch out of MDB we believe, has $1 billion market cap potential. We have 2 more that we can launch out of eXoZymes that we believe have that, that are massively game-changing. And so there was a pivot. What does that mean? Now it's get those companies stood up and then those companies will go and do license agreements and partnering after they've developed a bit more. And I think that that's been the shift that hasn't been communicated. But I think Michael is doing a great job and the team at eXoZymes is doing a great job of positioning the company for success. I think it's going to become fairly apparent, fairly soon.

Actually, I don't know if people are aware, but our former partner Lou Basenese did a great interview with Michael last week. I think it came out a couple of days ago. It really kind of goes through that what you just described in 30 minutes. I think they did a pretty good job explaining it. So that's an asymmetrical upside on those 2, whether it's cannabinoids or NCT. That's -- you're about ready -- we're closing in the process of just closing and announcing in Paulex. Can you talk about -- this last the question, we're out of time after this, Chris, but elevator pitch, why is that asymmetrical? What do you like about it? How much we're going to own of it? What's the game plan going forward?

It's super simple. This pathway that has been focused on by the folks at Mount Sinai and others, which basically takes breaks off of being able to produce beta cells is -- we've got a drug that we believe is the best drug for this pathway to enable beta cell production. It's quite frankly, if you can reinvigorate beta cell production and produce insulin. It's the biggest thing going. So the asymmetric upside is -- it's super straightforward. It's a $40 million post-money valuation after Phase Ib, which should be about a year, we start producing beta cells in patients. I'd be shocked if -- it's got to be a multibillion-dollar valuation. So while it is a bit risky, the upside -- you get paid with the upside. And I mean, it's significant. And we've got an unbelievable team. These are the guys that made prevention worth $2.9 billion in the sale, and we get to partner with them again. And I'm not saying that this is going to be the only drug. We might have another drug come into the pipeline, but these are the kind of guys that can execute clinically. One, they've got great pickers. They have the ability to pick something great. And number two, they have the ability to execute, get it through trials and get it to success. So we're super excited to be partnered with Francisco and Miguel. We think that they're superstars and we own a nice chunk of this company. I think it's going to be 6 million or 7 million shares. So I don't know if...

What's the timeline on it, Chris, how long we got to wait to figure it out?

I think don't quote me exactly, but it's -- we'll be in the clinic next year, and we'll start to get clinical results pretty quickly.

Well, with that, that's the last question. I didn't get to all of my, tried to reply specifically if you didn't hear the answer to your question, hopefully, there's a reply in your Q&A. Appreciate all the questions, very great questions. And I'm going to throw it over to you, Chris, to close it. And Tony, you can take it from there.

All right, everyone. Well, thanks again for hanging in there. It's been a great time. The team has done a great job at MDB, we're slugging it out to make this a big success. So we're excited for the future. And we want to thank you for being here and hanging in there and being part of the community. So thanks again.

And thank you, everybody, for attending today's presentation. This will conclude today's conference call.