MDB Capital Holdings, LLC

conference call. We appreciate you joining us this afternoon. At this time, all participants are in listen-only mode. Before we begin with our formal presentation, I'd like to remind everyone of several important things. First, a question and answer session will follow the formal presentation. If you have questions during the presentation, you can type them into the chat to be answered during the Q&A session. Questions can only be seen by the moderator. And as a reminder, this conference call is being recorded. Please remember that statements made on this call and webcast may contain provisions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent our current judgment on what the future holds, and they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as the date of this presentation. Please beware that we are not obligating ourselves to revise or publicly release results of any revision to these forward-looking statements in light of any new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most current Form 10-Q for more complete discussion of these factors and other risks, particularly those 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. Also, a replay of this call will be provided on mdb.com. Your host today is Chris Marlette, chief executive officer and co-founder of MDB Capital Holdings. And he's joined by George Brandon, MDB Capital President and Head of Community Development. Chris will lead the update on our second quarter ending June 30, 2025. So at this time, I'd like to turn the call over to Chris Marlette. All right.

Thank you, Tony. Well, thank you all for joining today. And I wanted to welcome George to the call. George is going to be talking to what we're doing on community development and other areas. And so I'll kick it off with the financial perspective. So as you all know, our revenue is largely from financings and we didn't complete any financings this quarter. So we had some revenue from PatentVest as we are starting to scale those operations. And our goal is really to offset operating expenses with financings. And then the equity in the finance companies and our big idea companies is really the upside for shareholders. so we incubate as we incubate more of these um you know the current revenue from launching more developed companies really offsets any sort of the cash operations of the company And there's always this balance of, you know, how much equity are we looking to generate versus fee income? And it's a balance. And we're trying to be cautious. We're also trying to balance making sure we have enough companies so that our community can effectively build a public venture portfolio. For the first six months of 2025, we had cash utilization of $3.4 million, and we expect to be closing some financings in the second half of 2025 to reduce or eliminate that cash usage. Let's talk about where we're headed, not so much where we've been, because it's been a challenging last sort of year for all of us as shareholders. And I think that what's happening and what we're feeling is very different from what's being reflected in the stock price right now. So all I can tell you is that public venture, the momentum is really building. And we're super confident in what we've built. And we really do have... the most sort of unique and capable platform to curate and deliver these market-leading companies that really have this sort of 10 to 100-bagger potential. And we've been doing it for 28 years. We recently published a a report that talks about the 17 companies we've kind of conceptualized and taken public. And I think it gives a really good overview, which we've been really presenting to a whole new group of investors that have never seen public venture before. And we're really getting a great response. And what we're really finding is that they see this as an unbelievable asset class to position their investments in going forward. But we also recognize the key bottlenecks that we really have kind of realized what's happening over the last year. And quite frankly, the investor hesitation towards deep tech life science investments right now has been quite obvious. What's happened is that this has been the absolute worst segment of the market And we understand that that's where we've basically created billions of dollars of wealth for investors and for founders and for people who have worked at MDB over the years. And that's just not been the place to be. The other thing we've recognized is that as we start to scale the number of companies we bring out, we need to scale up our investor community. to really you know support you know these high quality opportunities we're creating and i can tell you that our team has done a phenomenal job on on all fronts and we're um you know our our analyst team as far as curating and and standing up new opportunities which i'm going to talk about in a second and then uh really expanding our investor community uh george and his team has been doing a phenomenal job and so we'll get into that so to really realize the promise of what we build as a platform, we really need to bring investors what they wanna invest in now. And I think that the opportunities in profitable growing early stage companies that still have an asymmetric return potential and public market liquidity is really what we're hearing people want. And thankfully we're very well positioned to add value to these opportunities beyond life sciences. And in addition, obviously we need to expand our distribution as I touched on, and we're reaching out to these new investors and partners. And you'll hear more about that from George as we get into it, but that's going incredibly well. And what we've realized is we provide a really attractive alternative for allocating capital versus sort of traditional venture or angel investing. So the product mix, what we've learned is, again, early stage life science companies lacking revenue, momentum, or profitability are really struggling. These companies that we've done are taking longer to develop, as is many times the case. But in different markets, the markets were a lot more forgiving. We funded these companies at what we believe super attractive valuations. But, you know, obviously the market has to, you know, value that. And right now it's just not that's just not been the case. And so investors want to really balance, you know, quicker returns with their venture bets. And I think that that's why we're we're starting to expand the universe of companies we're looking at. The other thing we realized is that profitable growing companies with revenue momentum are super highly valued in the current market. And that's really good news because I think that that's going to have a profound impact on how companies look to raise capital or to see their companies highly valued. That's not happening in the private venture world today or in private equity. And so we think more and more of these kind of exciting growth companies are going to go public. And so we see a big opportunity on the horizon. And our team has done a great job of sort of curating more and more of those companies. So. As we expand our product mix to include these profitable companies with revenue momentum, we think that we're going to get a lot better reception from all the various investor groups that we're talking to. And I think that today we announced our first profitable company that we're going to be taking public. It was filed with the SEC, which we'll talk to a little bit here in a bit. But we're still continuing to focus on companies that can become new leaders and create new categories. We're not just doing companies that are profitable. These are still companies that still have that 10 to 100 bagger potential that are blazing new trails and creating new businesses. So really, we believe will enable us to get more deals done by expanding the investor interest beyond life sciences. So to that end, today we filed perspectives for what I think is going to be potentially the next, you know, monster beverage type opportunity in the beverage space. And what these, what Buddha Juice has done is, He's created this new category called Ultra Fresh. Today, grocery stores don't have fresh juice because they have to juice inside the stores. There's a shelf life issue. And these guys have figured out how to do centralized juicing. And they're getting big traction with big chains. It's super exciting. They're growing rapidly. And we expect great things from them. I don't want to spend too much time on it, but it's been a great experience in working with the CEO who I've known. They were very much looking forward towards partnering with private equity. They had some experience with private equity in the past, and I think they really saw that the public markets are a better place for them to really grow their company, raise additional capital to meet the expansion that they see coming in the very near future. So look forward to talking to you more about that company as we take the company out and complete the IPO. So again, we really believe that the public market is the place to be. And we see a dramatic shift occurring away from private equity and traditional venture. And we're hearing that more and more from the RIAs and family offices and other investors that we talked to. What's happened over the last 20 years is we've seen Up to 35% of these portfolios of these family offices allocated to private equity and public venture, excuse me, traditional venture. And we see that as being, they're all coming to the same conclusion at the same time that that's not the place to be. And so they're all looking, they all see the benefits of having liquid securities that are priced at transparent pricing as opposed to the opacity that exists in private markets. And I also think that the entrepreneurs that run the companies are recognizing the drawbacks of private equity and traditional venture. And we're helping them to understand that they can go public and actually understand do it in an efficient way and not believe all the things that have been said to them, which is it's super expensive to be public and companies die when they get in the public markets, et cetera. The companies that are growing and profitable are doing incredibly well in the public markets right now. And what's really encouraging is not many underwriters have the process or platform to take these real estate companies public like we do. So we think we represent a really unique opportunity for these companies to go public. And we're having great conversations with these people. And I think that they're in companies and they're finding that this is a very exciting alternative for them. We also, you know, we're not throwing the baby out with the bathwater. And we really started to think about what are we going to do in life sciences and how are we, where are we going to focus our efforts and where is really the big upside? You know, we've had, you know, oncology got very, very overinvested and there were too many companies and it became very, very difficult in oncology. And And so we really have started to think about, where is the future in life sciences? And we really believe that metabolic health is really the biggest opportunity of our time. And metabolic health is, is such a gargantuan opportunity that is now just being scratched upon the surface with what we're seeing with GLP-1 drugs. And I can't overemphasize enough that if you look at the drugs for both diabetes and for obesity, and other therapies, we're looking at probably $200 to $300 billion, which dwarfs all of the other pharmaceutical markets. And so we see this as, one of the greatest opportunities. Obviously, there's a lot of other people investing in things like crypto and AI and other things. We think that AI is going to be a big driver in healthcare, but we really believe that what's going to happen in metabolic health is perhaps the biggest opportunity we've ever seen. And our team has done a great job of curating what we believe could be really some of the greatest opportunities in metabolic health. And we're really focusing on this area, which we call the metabolic switch for these hundred bagger potentials. These are all, you know, kind of companies that we think can represent multi-billion dollar valuations and we're bringing them to, you know, to our community at, you know, very modest valuations. So we've been out introducing Pollux Bio, which was built by a team that we worked with at Prevention that we had a great result with that got a drug approved for type 1 diabetes. was purchased by Sanofi for $2.9 billion. They came back to us with something that we find very exciting that could be the first small molecule drug to really regenerate beta cells, which are the pancreatic cells that generate insulin. So this could be a first-of-its-kind drug that would be you know a massive win all these things all these companies have in our mind very near-term potential these aren't long-term uh you know uh propositions that take a long term to figure out if they're valuable so with a modest amount of money we believe that pollux can can generate hopefully positive data that could generate you know a significant readout and significant value As some of you may know, Exozymes, which we launched and took public, has launched a new subsidiary called NCTX. And NCTX is an unbelievable potential value driver in that they have figured out how to biomanufacture NCT. And that has not been done. And we see that NCT is one of the most promising platforms, both as a nutraceutical and a pharmaceutical, to mobilize pathogenic organ fat and both in the liver and the pancreas. And it works via a completely new approach. using mitochondria to effectively mobilize fat as opposed to basically preventing people from eating like the GLP-1 drugs do. And then lastly, GT Metabolic is a company that has what we think is an unbelievable metabolic switch through magnets that basically does incisionless, very faster, you know, laparoscopic procedure to do what they call a duodenal bypass. You swallow a magnet, it basically enables what we call an anastomosis and And they have super impressive patient data that basically, you know, in early patient studies, switches off diabetes and also causes sustained weight loss. We're super excited about all three of these. And we think all these have multi-billion dollar potential. And I really want to... thank the analyst team for all the hard work they've done to not only discover these, but, you know, put them together. And we'll be presenting all of these at our September 4th event. Now talking a bit more about expanding our community. And I'm going to let George maybe talk to this a little bit, or do you want me to talk to it, George? You want to go ahead and.

Well, I mean, you know, one, it's something I work with every day. And I think what Chris is alluding to, and it's very obvious, is that what we're seeing in venture and private equity is there is a confluence of moving to liquidity. Their venture right now is constipated. We just put out a paper that Will Rossellini and Javier of Pat Invest put out yesterday about the AI and the rise of... deep tech and really the decline of the SAS model software. And, you know, AI is doing a number on a number of different areas. It's really positive to what we're trying to do and where we're going. And so I think family offices, RIAs, they're figuring it out. They figured it out, you know, a couple of years ago and they're not willing to really look for the, what was a seven to 10 year hold going to 10 to 11 to 12. And so public venture has become, you know, we're kind of the new, new thing that's been around 28 years. And so we're coming up with a number of different models to help not only these angel groups, but really RIAs and family offices to be able to invest and play along with our model over and above just being a shareholder in MDB and being able to participate in everything we do. That said, Chris, why don't you go ahead and talk a little bit about, I mean, the very fact that you know, you got invited to a family office conference. I don't want to give all the details on that because I don't have them all. Is that something you can, and I'll come back and talk about this, the Koretsu announcement we just announced.