MDB Capital Holdings, LLC

Greetings and welcome to the MDB Capital Holdings Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Lou Bassanese, President and Chief Market Strategist. Thank you. You may begin.

Thank you, Operator, and welcome everyone to MDB's third quarter 2023 business update conference call. I am Lou Bassanese, President and Chief Market Strategist at Public Ventures. Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements. These forward-looking statements, whether in prepared remarks or during the Q&A session, are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the risk factors section of our periodic filings with the Securities and Exchange Commission. Specifically in the company's Amendment Number 5, filed on July 6, 2023, the registration statement on Form S-1, initially filed on November 10, 2022, and its quarterly report on Form 10-Q, filed yesterday with the SEC. Except as otherwise required by federal securities laws, MDB disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions, and circumstances. We kindly ask that you refer to the company's SEC filings for more information about risks and uncertainties related to forward-looking statements. On the call with me today are Christopher Marlette, CEO and co-founder, Jeremy James, Chief Accounting Officer, Anthony D. John Domenico, Chief of Transactions and co-founder, Will Rossellini, PatentVest Chief IP Officer, and Mo Hyatt, Chief of Entrepreneurship and Operations. With that said, I will now turn the call over to Chris Marlette. Chris?

Thanks, Lou. Well, I want to thank everyone for being on our first call. Hopefully you'll bear with us and and as we explore the way to best communicate with you and our goal is really to be as transparent as possible, as clear as possible. So, you know, we're going to look for your feedback as to how we communicate. You know, we're always open to suggestions. As we always say, this is a community. We want to get better every day. And so with that, you know, I welcome you to the first, the very first call as a public company. We're excited to be here. It's been a long journey. But, you know, we're very excited about our future and our, you know, our platform as it's developing. So, What I want to try to do is really focus you in on what's going to drive shareholder value. And what's always driven shareholder value and stakeholder value at MDB has been the creation of these big ideas where we transform ideas into investable public companies that have a very high probability of commercialization in areas that are meaningful to humanity. So we've been doing that for over 25 years now. and partnering with universities and inventors to create billions of dollars of stakeholder wealth. And when we say stakeholder wealth, that means the inventors, the universities, obviously the investors have the largest stake in it. And of course, MDB with the value we create is a big stakeholder as well. And what's new to the platform, I would say to some degree, is partnering with existing public companies through our public ventures subsidiary. And there we identify undervalued companies that we believe can be technology leaders in the future. So we really partner with them to create new technology leadership. We've been doing that off and on throughout our history in addition to launching sort of the big idea companies. And a big part of making this happen, as we'll talk about, is it's not only our process and our ability to see things other people don't see and then create a great company. It's also the people that help make that happen with us. And that's really why scaling our community platform is so critical. And hopefully you'll understand sort of the method to our madness and the way we've created the platform.

Next slide, Lou. Lou, are we on slide four?

Yes, it's showing. Okay. So, I guess I'm lagging behind here. So, the Value Creation Platform, as I mentioned, is really about process, and it's really the patent-vest process, which is curating the best opportunities and then really curating the best people through the development of our community, and that's where that will be done in public ventures. They work together to create these new technology leaders. And so I'll talk a little bit about that, but really our future is really determined by our people and our processes, and we're only as good as our people and our processes, and we have a commitment to get a little bit better every day. And we hope that as we get a little bit better, we'll attract the best people to be part of our visionary mission of improving humanity by unleashing the power of these big idea companies. So, you know, the core of this process is the curation of those companies. So I'm going to turn it over to my partner that I started MDB with 25 plus years ago, Anthony DiGiandomenico, who's head of transactions and really manages the analyst process that's curating these big new ideas. who'll go into quite a bit of detail on this slide about what we do and how we do it.

Anthony? Thanks, Chris.

As Chris mentioned, we've been doing this for about 25 years. Chris has been doing it a little longer. And we believe we've achieved a repeatable process to take a disruptive, innovative idea and convert it into an investable asset. Critical to this belief is the fact that we figured out the most important investment criteria and continually refine this process to identify companies with the best potential to become market leaders in the technology category. And the leadership is really the key. There can only be one leader. We'll take a few minutes to explain the process as well as provide numbers to help you contextualize the amount of diligence that we're conducting on a regular basis to find the most compelling opportunities for shareholders in our community of investors. At the macro level, we're looking for differentiated technologies that address significant unmet needs and we believe can achieve a patent leadership position. We determine the time and capital required to get to a significant value and collection point. More specifically, we've trained a team of seven analysts and growing that leverage Pat Invest's intelligence platform and process and other specialized software tools to screen for opportunities that are big, unique, and protectable. Because our tech platform and rigorous training program, each analyst can effectively screen a new opportunity effectively and quickly, usually in less than a couple hours for each opportunity. The hard work is defining the probability of a positive inflection point, the time and money to the inflection point, and the payoff at that inflection point. If the first phase of diligence takes about one to two hours, the second phase takes 10 to 12 hours. It involves time. identifying key players in the technology category, producing an IP landscape report that properly contextualizes the potential for market leadership, creating patent prosecution history reports to assess the value and breadth of technology claims, analyzing relevant industry and company data, creating benchmarks for future comparisons in the evaluations and valuations, reviewing company relevant financial information and metrics, applicable academic and industry data, specific peer-reviewed literature. And finally, interviewing correct key opinion leaders within and outside our community of investors and leveraging our community of investors to find those key opinion leaders. With that understanding of the process, I'd like to provide you some numbers around each pipeline, which will give you a little more perspective on our process and how the work our analysts do enables us to find these high probability opportunities to create shareholder value. So Public Ventures is looking at existing public companies. We've developed a list of public companies with less than $500 million in market cap and some patent protection. That has about 1,400 listed companies in it. We then screen them to determine if each technology addresses an unmet need and is unique and protectable. We found 700, about 700 of those companies have IP, but it really doesn't relate to their business, or the IP they do really isn't unique or protectable. But we did find 700 companies that made it through that initial screen. Since then, we're evaluating an average of five companies per week for the probability of a positive inflection point and the time and money required to reach the inflection point, as well as the potential playoff at the inflection point. These factors and evaluations are changing constantly within that universe. So each public company progresses, has some change in valuation. They may change strategy. They may change IP. So it becomes a – once we get through those 700 companies, we'll continue to monitor and look at companies that come in or out of that universe based on those criteria. For the active companies, we've been conducting another about 10 hours of diligence to screen for the most asymmetric bets within that universe. This resulted in about 36 companies right now that we're looking at doing additional work in meeting management, talking to KOLs, and hopefully a offering in the coming year. MDB's big ideas, very similar, but there we're really looking for things that we can cultivate, not curate. We're looking at the same process, but we're looking in different places. Technology conferences include about 5,000 ideas annually. References from our community, which are high quality referrals from our community, which are high quality. There's 100, but they're very interesting. We're very excited about the quality of deals, technologies that are being referred in by our community, and that's going to grow as our community grows. We also look at scientific publications, Nature being one of the most popular, which gives us another 1,000 ideas or so. IP at universities, tech transfer offices, This is another 20,000 or so ideas. So far in 2023, our term has reviewed 3,391 ideas. And out of that, done enough work to find 250 that fit our key criteria. We're doing conference KOL calls and meeting with management on 55 of those. And nine have made it through the final stage where we're really focusing on the financials, the risk-reward, and the asymmetric opportunity of growth. being a profitable investment. It's our intention that the technologies and companies that pass through that final stage of the diligence process will be engaged in formal negotiations for an investment by MDB Holdings. Our plan would be to inform shareholders about those technologies we successfully complete in investment. So in summary, as we mentioned before, the key to our success is our being able to review more and more ideas to determine quickly if a technology can become a market leader. The hard part, then the deep hard work begins with the roughly 5% of ideas that make it through the initial screening process. Once we partner with a company and make the investment, we deliver value beyond capital by leveraging our diligence to help them focus on the IT and business factors that should fundamentally improve their prospects of getting to a value-creating milestone and minimizing dilution, therefore maximizing our shareholder value. And it all, in today's environment, Whether it's for public ventures or big ID deals, we're looking for companies with inflection points for the next 12 to 18 months that need less than 25 million in capital to reach those inflection points. We look forward to sharing those opportunities with the shareholders and community members in the coming quarters. As a reminder, we intend to fund the first investment in the big idea technologies with corporate cash, then eventually spin out those technologies and those businesses via pro-rata rights offering exclusively to MDB Holdings shareholders. By the same token, we tend to offer and fund public ventures deals entirely through our community members. Therefore, if you're not an MDBH shareholder or an active public ventures community member, it's unlikely you will gain access to these opportunities. At this point, I'd like to turn the call over to Will, who will deliver the details on PatentVest.

Thanks, Anthony. Pat Invest is a strategic consulting and IP law firm. And we're the engine that helps to take these ideas and formalize them in the form of protectable IP. And so our process has been formulated through the MDB Capital 25-year operating history. But what we try to accomplish is overcoming the misalignment of incentives between inventors and patent attorneys. Inventors a lot of times don't understand the competitive landscape where they're inventing. They want to be first, they want to be famous, but they don't necessarily understand how patents work and how those patents can be commercialized. Patent attorneys want to get issued patents for their clients, and so they focus very much on getting claims. The problem is at the end of that process is a lot of worthless patents. So what we do differently as a patent law firm is we take a lot of time to understand the technology landscapes. So we understand who's in the space, what they're focused on, where they're investing. We watch their patenting activity. And we do this to get a one-time snapshot of where the competitive landscape has open areas to innovate and where it's highly competitive. We then take that understanding of the technology landscape and help the company craft a compelling R&D strategy, patent strategy aligned to a capital strategy so that they can utilize their dollars and labor and innovation muscle towards milestones that matter and return value to shareholders. So once we align on that compartmentalized strategic plan, we're able to say this is how we're going to shore up your existing portfolio with new filings. This is how we're going to rationalize your existing portfolio, not only what to protect, where to protect it, and how much to invest in continuations, et cetera. Once we have a firm base of protection and a strategy that we think is validated, we then help the company create a compelling narrative that's suitable for institutional investors, strategic and corporate partners, other innovation companies that might be interested in co-development, we help to craft that narrative in a way that fully exploits the value of the technology and the IP that the company has, and then we partner with that company to help them in the business development process. We do two things in that business development process. One, we help bring that narrative to light by socializing it with the right people. We've identified those people as part of our assessment analysis. This validates the plan that we put together for the company by getting these inputs from the market to say, We value these inflection points or these innovation points or these product features. We don't value these. And then as part of those strategic conversations, we very likely could enter strategic licensing partnership and acquisition opportunities. And so it's a full spectrum where we take a company that has likely innovative ideas, some issued patents. We're able to rationalize from idea all the way to value extraction in either the stock price or the license. to make sure it's the most efficient use of capital all the way through the stream. So we've just started that process with our first clients and I'm excited to see how we can speed up and become more efficient at delivering that all-in-one strategy.

Chris, we'll turn the call back over to you. Lou, sorry about that.

So we've talked about curating the best opportunities. Now, dovetailing that with curating the best investor community, we really have a great community of investors that we've curated over 25 years who are experienced in sponsoring big ideas. A lot of them are inventors or business leaders with domain expertise. I would say they all have a commitment to mentorship and long-term investment, and we like to think of them as value-creating investors as opposed to value-extracting investors that are common in most investment banks and traditional – I would call it financial investors. So Jeff Bezos had a good saying. He said the other day when he looks at companies he wants to buy, he looks for missionaries, not mercenaries. And I thought that summed up well what we're looking for is we're looking for missionaries, not mercenaries. And it's not about your money that you can add. It's really your intellectual capital and your heart that adds, you know, that lifts big ideas off the ground. And to facilitate that, we really recognized we needed to build this purpose-built clearing platform. Investing in public venture or early-stage public companies, has become very difficult as there's very few clearing firms that welcome that investment sector. That's just not what they do. Online brokers, traditional, we call it full-service broker-dealers, that's not what they do either. So we realized we needed to build a purpose-built platform to create sort of a frictionless investing experience for this investor group. And really, you now see Lou on national TV shows, regularly talking about public venture as an asset class. And we're excited because, you know, we've, we've, we've provided great returns to investors over the years. And what we think is on a risk adjusted basis is a much better value proposition than what traditional venture capital. And, you know, we're, we're sort of not really that well known. So I think as we have the platform to be able to deliver it and we We get that message out there. We think there's a lot of potential to really evangelize public ventures and asset class. Slide eight, you know, we've created multiple billion-dollar value companies from ideas, and really our ability to do that convinced us that, one, our process was working, but also that we need to figure out how to scale it. And so when you really think about why MDB went public, it was really about scaling, scaling our curating of opportunities. We knew it was a numbers game and scaling up our community and the people that bring these ideas to life. And so, you know, really what we're going to be talking about are these key initiatives to scaling up on slide nine, which is we really need to scale our analyst platform. what we, you know, the reason our analysts are so good and becoming better every day is it's, you know, I analogize it to golf. If you hit a thousand golf balls a day, you can't help, but be a pretty decent golfer. If you hit 10,000 golf balls a day, you might become a pro golfer. And so that's what our analysts are doing. They're, they're hitting a lot of golf balls. They're looking, they're turning over a lot of rocks. They're looking at a lot of companies and they get better and better and smarter every day. And, And our training program, you know, and the mentorship program we have there is really creating something special there. We know that nobody else on the planet has what we have and our ability to get through big ideas in a systematic way. So we're very proud of what we've created there and we think it's going to yield great results and you'll see the product of that work as we unveil new big ideas to our community. The second part is really scaling our patent best platform. And that's really where we take, we've identified a new idea. We've decided we're going to fund it, but we have to really trans, you know, transform that underloved opportunity or undiscovered opportunity into something that everybody wants to invest in and seize the vision. And really what that's, what that really is, is, um, helping investors to visualize, uh, what this looks like by getting to the promised land and all the steps to get there. And I think that if you think of the really great innovators that were able to utilize public venture to do that, people like Jeff Bezos, people like Elon Musk, they gave people a vision of what the future was going to be. And then they also articulated the steps that it would take to get there. And then obviously they executed on those steps, which is what enabled them to create so much value. We don't see it any other – we see it the same way. But getting your mind around that big idea and getting that plan together is a really, really tough thing to do. People aren't trained in IP development. They're not trained in connecting IP and R&D and financing and business development. And that's the hard work we're doing at PatentVest and, again, It's about being able to scale it. We've done it effectively on a onesie basis, you know, episodically with the companies we've started. But to really create this, you know, this repeatable platform, we have to scale that. And then our community development is self-evident, and we believe the clearing platform is one key element to helping scale up our community. So we get to slide 10. Really what I'm excited about is our foundation is set. We've got, you know, we've got an unbelievable amount of experience in our seven trained analysts. We're bringing on, you know, new junior analysts. We've got an unbelievable training program that we've put in place to really get them up to speed quickly. We've also been running summer internships for our investor community. We've had a number of our investor community kids that are in college be part of that. I encourage you that any of you that have kids, you know, that are in college that are interested in technology, we'd love to show off our processes and train people in our community. It's a cornerstone to being able to scale up what we do. And so we've worked really hard to develop PatentVest University to make that happen. And so, you know, we're really able to scale according to, you know, the new ideas we have to evaluate. You know, what's the right number of analysts we're going to need? I don't really know. But I kind of feel like if we double our analyst, you know, count, it'll enable us to to really, you know, scale up what we're looking at. Um, you know, we've already sort of looked at the public company universe. I think we've got our mind around most of them. Um, so I think over the, you know, over the next, you know, few years, um, we might, you know, double, you know, or triple if, if necessary, um, that analyst, uh, platform scaling patent best is, um, is really about continuing to bring on IP strategists, patent attorneys, and additional IP analysts to basically continue to scale up the processes that we're refining and developing as we go. As Will touched on, we've honed our processes for our own work and now delivering it to outside companies is, is, is, what we're now figuring out how to do and fine-tuning it. And when we do, this integrated strategy really supports this optimized R&D IP capital enablement strategy for technology leadership and really creating a high-impact IP portfolio in addition to to that, which is what we know leads to high-value partnership deals with large embedded companies in the industries that these companies operate. I'm going to turn it back over to Lou for slide 12 and to talk about community development.

Thanks, Chris. I appreciate it. And just to touch upon what Chris said is it's about processing people and half of that people component is the analyst team that can leverage the process we've proven out over time. But the other half is an integral part as well. And that's our community. So on the community development front, there's really three key initiatives that we've been focusing on at public ventures. First and foremost is building that foundation and that infrastructure to be able to connect our community of investors. So unlike traditional investment banking and venture capital, where they silo investors, we actually want to bring a true community together. where they can collaborate, communicate, and share ideas, as well as the research that our team of analysts has done. So in that area, we spent the good part of the last year building a member portal to facilitate those interactions, part LinkedIn, part Yahoo Finance, is the way I would describe it. And we launched that with our founding members, which were the investors that participated in our private placement. Last year, we're going to be hosting our first member call to bring that community together around a topic of common interest interest, potentially an update from one of the companies we previously financed. That'll be in December. So that's the first initiative, set the foundation. The second is now to grow that community. So we will be launching out with new member initiatives that will start at the beginning of the year. Everyone that came into the MDB IPO or that has been as an MDB shareholder is eligible to apply for membership as well as once you're a member of the community to make referrals and And then the third key focus for us on the community development front is really, as Chris mentioned, building awareness of public ventures. This may not necessarily involve just deals and companies that we find interesting, but just the asset class itself. We really believe that if we can elevate looking at companies that have technology to be potential market leaders, we can really elevate and build up a community that can support them, whether that's internal with our approach or just the asset class more broadly. So with that said, on the community, if you are interested, this is an opportunity as an MDB shareholder to join a private membership community of investors that Chris articulated before. Share a lot of common interests, are typically domain experts that can lend a lot of intellectual capital as well as monetary capital, and it gives you the opportunity to invest in these early-stage public venture companies. You'll see the qualifications on the screen. This is not a community that's just open, a free-for-all, but is more curated just like we curate companies and opportunities. And then most importantly, there are definitive benefits to being a member of the community. Outside the collaboration, the connectivity in the community, you do get priority to indicate interest in the venture stage investments that come through the pipeline through the analyst team. You also give a PV trade account, which is our trading application web and mobile base that I'll speak about in a moment with no annual fee. And then what I think will be an extremely valuable add just from the early feedback is our member portal and public venture directory where our analysts, you're able to view the analysis and engage in conversations with other experts and investors on all the publicly traded companies that are under $500 million market cap and have at least one patent. So that's on the community development front. On the self-clearing platform development, I think what's most important to stress here is that this has been a three-year work in process that has now culminated with getting our final regulatory approval to be a self-clearing platform. So if you pair a process with the right people, both internally and externally, the connective tissue becomes the platform that brings everyone together. And I think the cornerstone of that is our PV trade trading application. This, again, is a private invitation only. brokerage account for community members. It makes it easy and frictionless to invest in these venture stage public companies. And it was purpose built, as Chris mentioned, to facilitate investments in this area of the market where most broker dealers and online trading platforms are not tailored to do. I would tell you just to keep in mind some key milestones and what's ahead is that we did get the final approval from DTC for self-clearing. finished up the build out of the infrastructure to finalize that and are now in the process of onboarding and testing internal accounts in the coming months. And then we will drive new account growth and open up that application process heading into the first quarter of 2024.

So with that being said, I'd like to turn it back to Chris. Not sure if we're having audio difficulties. Chris, you may be on mute.

Sorry.

Luke, all right. Sorry for that. What I would say is developing new technology leaders is really what we do, and that's where the shoulder returns are driven. So what I wanted to do was we've started to develop what we call the investor toolkit to understand the corporate performance for MDB holdings overall and 10Qs and 10Ks articulate statutorily what we're supposed to communicate but I think that the interpretation of those is super critical and we believe in total transparency and helping people to understand how we're judging our own performance our own KPIs and how we measure ourselves so And if you look at slide 16, really the largest bucket of value creation are these big idea spinouts. It's what we're developing within design and other companies that we have in the big idea pipeline that you'll be hearing about hopefully soon. The second most impactful bucket of value creation is the equity positions in these public companies that we have that we've financed through public ventures. and that we're positioning as new technology leaders. And if you sort of think about from an overall basis, the fees that we're generating in both public ventures and Pat Invest largely offset, we expect to offset the fixed operating costs of the overall platform, which I'll detail here in a bit. So, Again, measuring our performance, it's really around these analysts' KPIs and really how many companies are we really critically interrogating. And then throughout Pat Invest, with the development of these companies, is really how many of these companies can we convert from ideas to leaders. That's really how we're going to judge ourselves there. And then... The third bucket is public ventures, which I would say the number one driver of the KPIs is how many new companies are we actually financing here, how many new members, new accounts are we onboarding, and then ultimately assets under management. So if you look at the financial model key components, it's really the number one thing that is sort of the money going out, if you will, is our cash overhead cost and stock-based compensation. And then the big idea company valuation is, you know, sort of, you know, the revenue, the biggest revenue bucket. And then as I described, the fees from both public ventures and patent vests are valuable but less impactful. And so I probably should have put number one as being the last one, so the first three are revenue, or two through four are revenue, and number one is actually expense. So if you go to slide 19 and look at our organizational and overhead snapshot, it'll give you a bit more clarity on what our total fixed cash operating expenses are on an annual basis. So we have six. 17 senior executive and operational people in our organization, and really we're fully staffed, so we're not looking to hire any more people in the U.S. We really believe that the mentorship and training programs that we're putting in place for our Managua-based team that we have, really the biggest bucket of our competition costs are here in the U.S., and we feel, like I said, that that team is well set. When we decided to go public, we decided to provide significant RSU equity incentive to key executives that were going to help Andy and I, who had started the company, to build the platform. And the non-cash operating expenses in the first five years are going to be significant as a result of those RSU awards. I will say that 50% of those senior exec RSUs only invest after we've delivered sort of $20 a share in value back to the shareholders. And so there's a significant part of it that is performance-based. And then, of course, since they're based on time as well, you know, there are significant incentive for all of us in the executive team to perform to be able to earn all of that compensation. Notwithstanding, it'll be accrued even if it's not completely earned, and so that will have a relatively big impact on reported earnings even though they're not cash costs. Our Monago-based team is now 27 people. and where most of our growth will occur. It's currently eight analysts, three people in accounting, seven in operations, nine in IT and data management, and the current cash, OpEx, for that team is approximately $1 million on an annual basis. Our public company and admin costs, we're always trying to watch best we can. There's a significant amount with the clearing operations, accounting, legal, etc., adds up, and we're trying our best to manage that. If you look at the total number, our current total fixed cash operating expenses are approximately $8.1 million per year. Um, so, um, what you can, you know, sort of back of the envelope do is if, you know, if you look at us doing a few financings a year and having a reasonable number of companies on board with patent vests, we can offset a large percent, you know, a very large percentage of those cash operating expenses, um, as we, as we get our, uh, uh, platform operating, you know, optimally. So, um, Slide 20 is really to give you sort of an overview of our organizational structure. So you can see the senior executives are at the top, all U.S. based. The shared operational team is really the analysts that are doing the heavy lifting for curating and helping positioning these big ideas. We do have... Dave is our chief technology officer and has been developing the software around Pat Invest but also is in charge of overseeing our clearing platform and making sure that's operating properly. We have a small team in Nicaragua that helps Dave. And then accounting and admin, the heavy lifting on accounting that supports Jeremy is in Nicaragua and Maria Jose and Darling and Catherine are are making it easy for us to start to do the hard work of financial reporting, but also as we add in new big idea companies, we kind of take over their accounting operations. So it's a lot more work than you would think, especially when you're doing grant income accounting and things like that. Um, you know, we have, uh, you know, we expect most of our companies are going to have significant grant income. It's complicated. And so we need to build out that team. It's a lot of work. Um, and so, uh, I expect we'll be adding at least a couple more people in accounting and admin in our Monago office. Our PatentVest team, um, is, is made up of our chief operating officer, Javier Chamorro, who, who really, um, has a responsibility of moving the operations of that together. Will is really the chief IP officer that's working largely with me and our either outside or inside councils to formulate the IP strategies for these companies. And then we have our Tyler, who is great at doing, you know, helping us to really do business development and training of our teams. And then we have our data specialists that keep our proprietary patent database up to date, which is a significant job. The public ventures team, you know many of them, but we now have our operations staff in Managua as well, and you'll get to know them as you're trading and needing wire transfers and information on your account, what have you. We've got a great team of people. I think you're really going to enjoy dealing with them in addition to all the people that you're used to dealing with at Public Ventures. So slide 21, the big idea company valuation, you know, we spend these companies out or we spend the technology out, we'll start a new company. We'll put in capital. We'll own a very large percentage of the company. The inventors own a large percentage of the company along with universities. And they're valued at basically market value, which is sort of the last financing, but a lot of times that's a significant discount to what it will trade for as a new public entity. So once it becomes publicly traded, that's where you tend to see the big markup in value. And so when companies like InDesign and our next big ideas come public, that's where you'll see very lumpy sort of valuation shifts in our balance sheet and income statements. So if we own 40% of a company like InDesign post-IPO and it trades for a $200 million valuation, then you've created $80 million gain, if you will, or close to it, maybe a $75 million gain. et cetera, you can do the math, and that's where we'll give you guys the Excel spreadsheet to play with it, and you guys can decide where you think these companies will trade and what kind of value creation that can be for the shareholders. Our goal is to monetize these companies when they've matured and reached a major commercial or valuation inflection point. Historically, a lot of times that's been sort of 24 months post-IPO, but it's a highly variable period. And, you know, so again, can't promise you when they happen, but usually you'll see on our balance sheet, you'll see it move up when we take them public. And then once they're public, you know, however they're progressing is what will determine, you know, how big the gains could be. Our goal is to distribute out the cash and the shares on each one of these while reserving a modest amount to fund the next big idea company. Our hope really is to keep the platform sort of cash flow positive so that once we monetize these, it really goes all back into developing new big idea companies. The public ventures equity positions, sometimes we'd like to get paid in shares and warrants. We have to be mindful of our cash positions, and sometimes we will you know, take cash and then equity in the form of warrants. And those common stock positions will move up and down, and that will move around earnings. Also, the warrants that we receive are valued on a Black-Scholes basis, which is probably higher than the, you know, actual market value. And so we'll be calling that out in the model so that you guys see that, you know, when the earnings, you know, when we have a quarter where the earnings might be really big, you know, we can, you know, mark them appropriately so everyone understands the value that was created. And in the same way, we really want to monetize those positions once the value creation is realized or the investment, you know, or if the investment thesis has changed, we will, you know, look to monetize that position. Public ventures, fee income, again, the average commission will be about 7% with some warrant compensation. And we really charge it based on the efforts necessary to position the company as a new technology leader. So a company that's teed up pretty well will have less compensation because there's less work to do. But we do price it based upon how much work our team is going to have to expend to sort of get it there. I also think as we get our clearing platform up and running, ATM financings will be a critical part of what we do. And I also believe that membership income after the platform is well established will support community building efforts, much like these established networking communities like YPO or Tiger 21. And to a lesser extent, trading commissions will contribute. And, you know, the... Fee income will really be driven by asset gathering, new member recruitment, and obviously new financings. Patent vests, our goal there is to have approximately 12 companies on board at some point over the next 12 to 18 months. We see that the primary income will come from their annual service fees of $200,000 to $300,000 and global patent prosecution legal fees as well. And again, the key KPI is having the number of companies that are on the platform. This is the last slide, and I would say in our future calls, you know, we're going to update you on the financial model. We'll get through that very quickly. The future calls will be done in, you know, our presentation is meant to be less than a half an hour, so we'll be a lot shorter than this one. And our... Our goal is to get you through the financial model quickly, any other key events that happened, but really focus in on the big idea companies that we're invested in, giving you updates on those companies so that you understand what's really moving the needle is our investments in these companies. And we really want to put the focus on our companies as you understand the platform better. With that, I'm going to turn it over to Moe. Hyatt, who has mentored and operated as interim CEO for Invisign and the development of it, to give you a brief overview of how things are going at Invisign.

Thank you, Chris, and hello, everyone. As Chris mentioned, I have served as the interim CEO at Invisign. I also serve as the head of entrepreneurship and operations here at MVD. And so I'll start by noting that by applying the disciplines and initiatives that you've heard elaborated on today's call, we not only create these big idea companies, but we also accelerate the development of them into becoming technology leaders that are poised to succeed in their respective markets. As many of you may already know, Invison was launched in 2019 out of UCLA around technology that really promises to shift the paradigm of how valuable chemicals are made. Much like plastics transformed our society in the 60s, we believe that biomanufacturing is the future of how everyday products will be delivered into commerce and consumers regularly. Our biomanufacturing 2.0 platform, which we have dubbed SimplePlat, is the type of big idea that in actuality consists of multiple platforms within the larger platform. We have demonstrated technical feasibility in making bio-based fuels that could transform and transition the energy industry and separately have also demonstrated feasibility to develop and manufacture novel cannabinoid drugs that are, for various reasons, not possible to be manufactured with current drug design and manufacturing technology. Our recent award, which if you follow our press releases, of additional grant funds from both the Department of Energy and the Shell Game Changer Accelerator powered by NREL program, helped to further validate and accelerate the work we've been doing at InDesign in the area of energy transition. We believe that InDesign promises significant value creation and are contemplating a spin-out of the company in 2024. We envision that InDesign itself, once it is spun out, will then create a number of spin-offs that are purpose-driven with respect to specific products or product classes, with the initial areas of focus being the aforementioned energy transition and pharmaceutical markets. In the coming months, we will host a separate session dedicated to InDesign only to elaborate on important developments and progress. So a lot more to come on InDesign as we get into 2024. For now, that's all. And back to you, Chris.

Well, we want to thank everyone for being patient to go through nearly our call today to really set the stage for future calls. And for those of you that have made it through this far, we'd love to open it up for questions. Lou will basically be guiding the question and answer process, I think.

Ladies and gentlemen, if you'd like to ask a question, you may press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment while we poll for questions.

We have a question from the line of Bruce Cannell, private investor. Please proceed with your question. Bruce Cannell, your line is live. Are you on mute?

Not anymore. So I was interested in hearing all the dialogue, but I could not tap into your website, and that was a little bit frustrating for me. But it was interesting hearing your thoughts and directions.

Thanks. Did you have a question for us today?

Well, the question I've got is like, how do we access this more than just having it on a phone conversation as opposed to access to video? And I was getting no feeds coming back through the system.

Well, we've utilized VIAVID, who's you know, sort of, I think the biggest conference call platform and you click on the link, um, that is in the press release and it worked for me. I can't answer why it didn't work for you. I apologize. Um, but, um, we'll, we'll look into, you know, what technical issues are, are, uh, you know, if other people are having technical issues, we'll forward it to them because they're, they're supposed to be experts at, at, uh, being able to enable, you know, the, uh, the video part, so I'm sorry about that.

Fair enough, and I appreciate your response, and we'll see what happens.

Okay, thank you.

There are no other questions in the queue at this time.

Okay, well, hopefully we'll be making these presentations available soon. And as always, you guys are always welcome to call any of the team members that you know. We know so many of the shareholders and people in our community. We're always looking forward for feedback and how to make all this better. So thank you guys for joining today, and we look forward to talking to you on future calls.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.