MDB Capital Holdings, LLC Class A common (NASDAQ:MDBH) Q4 2025 Earnings Call Transcript

MDB Capital Holdings, LLC Class A common (NASDAQ:MDBH) Q4 2025 Earnings Call Transcript March 31, 2026

Tony Dammicci: Welcome, everyone, to the MDB Capital Holdings Fourth Quarter and Full Year 2025 Update Conference Call. Thanks very 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. A question-and-answer session will follow the formal presentation. [Operator Instructions] 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?

Christopher Marlett: 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 has gotten off to a really interesting start. And so I thought I’d first kind of just talk about our agenda, which I know most of you are very, very interested in where our assets are, what we think about our current investments and what we see for the future. But I wanted to take some time to give you sort of a view from 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, a year-end shareholder letter, which will talk to a lot of what we’re going to talk to today, but in a bit more detail.

If you can get through it, it’s about 9 or 10 pages. But 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. So with that, I’ll start off with just reminding everybody our story, really, we’ve taken this proven model of launching companies about 1 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. And we did that before we were public, and it was a very nice business. And of course, the reason we decided to go public was that we believe we could scale that to 3 to 5 launches a year, maybe not overnight, but we really believe 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 most of our investors historically had 1 or 2 of our companies in their portfolio.

Q&A Session

So we did that for 29 years. We just did our 18th IPO. Never a failure means we never failed to get an IPO done. And every one of them, except for the last one, which is very new. It’s only a couple of months old, have traded at a very significant premium to the IPO price. And that really, I think, speaks to what we’ve done from an asymmetric value positioning perspective, bring 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. And so the scaling is really what we’re talking about. So talking about where we came from, and I’ve been in the business now for 40 years.

And 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 in many times, creating these companies in conjunction with inventors or universities or entrepreneurs. And so in the old days, we would look at 10-Ks and 10-Qs. We literally have to call Washington and get these filings. And 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 going to take public. The information challenge was really crazy. As a result of the Internet, we launched PatentVest in 2003, which enabled us to really understand deep tech very much in a clear 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.

And that gave us, in our mind, a real ability to really understand the critical elements to building leadership. And this leadership we saw was the critical element for these companies being able to trade at $1 billion valuations or have the potential to trade at $1 billion valuations. And as we refined it, we — in our screening criteria and our processes and trained our analysts, we could start to filter companies where 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 review thousands per year really because we could get through an idea in an hour or 2 by understanding did they have the ability to be a leader in a technology vertical pretty quickly with the development of PatentVest.

But we still had really a bottleneck, and we’ve really experienced that bottleneck over the last couple of years since going public at MDB, which is we can 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. So the deep diligence and all the market insertion risks and competitive mapping and the business IP strategy and then getting the — really getting the company positioned to be able to communicate its value add is very tough. And it’s still tough. It’s always tough with a big idea. And that would consume hundreds, if not thousands of hours. And it would take many months to get these companies ready to go public.

And so this has really been our reality and quite frankly, our biggest challenge in scaling that we’ve had. But I have to say, and I referenced in my letter that AI really is a game changer for us, and we are 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. And so when you think about the Internet, it really did a great job of catalyzing and organizing that information, but it really created sort of overload in inertia. You had almost too much information. Even when we were looking at patent data, when we first started, you would look at — you would do a screen and you would look at thousands of patents.

Well, getting to those thousands of patents was virtually impossible. It would take 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. And so what AI has really done and really done in a very, very tangible way, literally in the last 90 to 120 days is it eliminates that inertia. It really connects the dots at an unprecedented speed. And 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 has really become almost unbelievable. And 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 an unbelievably profound impact on our business. And I know AI is sort of the catchword of today and every AI company that comes in to look for funding, I’m always very skeptical of. But I can tell you that as far as using really off-the-shelf AI, things like Claude day-to-day within our operation and now building SOPs and agents to effectively execute what we can do doesn’t mean we’re going to 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. So 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.

And 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 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 real genuine opportunities can be boiled down very, very fast to a very small stack of companies. But 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, the real hard work was the deep due diligence.

And that deep due diligence was very — that took — that’s what took the hundreds, if not thousands of hours to do. And in fact, 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. And the information divide is just really, really difficult, especially when you’re talking about deep tech or disruptive technology. And so we really estimate that we can compress that time by 2/3. It’s really astounding. And you’re going to see it, obviously, as investors, right? So 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 it 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 — it’s fun for us because our mission is to get to the truth as fast as possible. And so we’re experiencing this real time. It’s like something I’ve never seen before. But then when you actually want to prepare that company and take it public, it would take from 6 to 18 months. And I think we’re going to be able to get this done in weeks. Like we — to give you an example, we just started on the S-1 for Paulex to take it public. Our team could actually put together a pretty good draft for the S-1 pretty darn quickly. And I think — and again, we’re still in the early stages of really implementing all these processes within our organization. But whether it’s the financial models, the business strategy, the IP positioning, we see this being done in weeks, not months, which has — when you talk about the scale issue that we’re — that we faced, we’re seeing this as a total game changer for our ability to scale.

And so — but throughout our business, whether it’s through PatentVest, through all of our investor diligence, I mean this whole thing is going to change. It’s going to change how our community reacts to deals. It’s going to change how deals get distributed. It’s going to change it at every level, and we’re seeing it real time right now. So over the — since we’ve gone public, one of the things that I don’t think has been very apparent to everybody that has 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 patent vest to really build those as separate discrete assets. Yes, they’re very obviously critical and important in our daily operating business, but they really are distinct assets in their own right.

And we’ve been investing about $4 million annually since the IPO on these assets. And that is super apparent because we’ve been able to take and stand up these 2 enterprises to where they now, in our mind, have significant independent value and in effect, big ideas that are going to be launched off into their own entities very soon. So in MDB Direct, what we did was super unique. And we knew that scaling IPOs, especially public venture IPOs was going to — was not a thing that is done with traditional institutional investors. Traditional institutional investors are looking for ideas that are much more highly developed. And so a lot of these companies that are sort of in the development phase or going public, a lot of them were starting to get funded by crowd funding and other platforms like this, Reg A+, things like that.

And now we’re seeing things — companies like Robinhood now being key distributors for these kind of offerings for big companies like the big major underwriters. And distribution is changing in a very, very dynamic way. But the key differentiator is clearing. So 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 — or virtually none of them are self-clearing. But they’re recognizing to be able to operate and access these investors, clearing could be a clear differentiator. And clearing is also the ability to be profitable. In many cases, stock loan margin lending, et cetera, these things are key cash generators for any company in our space that has any kind of assets that are built on their platform.

And so we know that what we’ve built here is a very, very valuable asset. And so it took 5 years of work with our vendors and our software developers and what have you to get this up and running. And 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. So 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 talked about 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 work within our organization to go to 3 to 5 companies a year and really start to scale this, we have to basically solve the distribution challenge.

And so again, I spoke about public venture as sort of being a very much of 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. And even today, 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, and he’s figuring out ways to do that in the offering because he knows they’re going to end up being the people that really want to own the stock. And the institutional investors many times came a lot later. And so we see an opportunity with these firms that don’t have self-clearing that are recognizing that distribution is going to change that this is a real opportunity to partner with other — either other firms to spin this off as its own entity, to sell it outright and then clear through those — clear through whoever we sell it to.

But we see this as a very valuable asset. To our knowledge, there’s no other clearing firms for sale or partnering capability right now. When we were looking to do this, we were looking at — there was only one clearing firm that was set up for sale or for partnership. And that firm, even with a lot of challenges and really not a huge platform, sold for tens of millions of dollars. And so 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 really a force multiplier, not only generate some value for the shareholders, but also partner on distribution, which I think could be a really great thing for what we’re doing as we have the ability to curate more big ideas.

And PatentVest, just the other big idea, just as big as clearing was, was to become a law firm. So we had built a patent research company before and sold it before we had gone public. And that company was very limited by the fact that we weren’t a law firm because we really — 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. But 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. And then as we 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. And Javier Chamorro, who runs 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 patent prosecution to foreign prosecution management to docketing to maintenance fees, all the various things you need to do 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 higher — a better experience for small companies and large companies that are looking to be more efficient and create higher quality.

So what we see is by being 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. And 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. And 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. So if you look at patent prosecution in the U.S., I think $10 billion to $15 billion is a conservative figure for how big that business is in the U.S. And we really think that we can garner a really meaningful share of that business by partnering with big law firms.

And we’re really excited about this. And I think that the AI legal tech market is boomed. Obviously, there’s been tons of money going into that market. We don’t want to call ourselves an AI legal tech company because really what we are as a law firm that is going to embrace AI. And I think that a lot of these platforms that have been funded, there’s probably — I wouldn’t be surprised if there’s 100 AI legal tech law firms out there currently. And 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. And so our portfolio assets, we have 2 portfolio assets outside of MDB Direct and PatentVest that I think can create a lot of value.

And obviously, eXoZymes which is, is public in Paulex, which we recently funded and are planning to take public later this year are, again, $1 billion market cap potential just like everything else we’ve done historically. And so 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 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. And if we could do that, why wouldn’t we just make them and sell those products. And so that’s where it’s going. And 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.

And 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 of really big ones was really super critical and making sure that we could scale manufacturing. And so as you’ve seen — hopefully, you’ve seen is that some of the press releases is that, 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. So it’s — again, this is a company that — I don’t know that anyone is going to want to 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, and we’re pretty excited that we’re at this critical point now.

And Paulex, I won’t spend a lot of time on. We’re going to 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. 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. So we’re very excited. And I think that I look forward to this IPO later this year. And we’re super excited that the clinical trial results could start to emerge at the end of this year or early next year that could be really groundbreaking.

So when you look at our 4 principal assets as it stands right now, eXoZymes as a current sort of market valuation. At year-end, it was about $45 million. The stock has come down a little bit. It’s about $30 million in market value currently of what we own. Paulex, we own 7.1 million shares of that, and it’s yet to be seen what we’ll price the IPO at, but it could be a very substantial asset. And MDB Direct, again, not making promises on the value, but clearing firms of this type have sold for tens of millions of dollars or — and I think we’re in an environment where the value of this could be much greater with where the world is going from a distribution perspective of new offerings. And of course, PatentVest, we’ve been investing in for a long time, has, in our mind, a lot of value.

We’ve invested 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. And then a combination of our cash, current assets through marketable securities, less all the current liabilities at year-end was about $22.3 million. And one of the sort of footnotes was we thought we were going to get Buda Juice done before year-end, but it ended up trickling into January. So it will give us some benefit in the first quarter. So when you look at the financial overview, I’m trying 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.

And — but 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. So if you effectively took the $4 million off of the $5.7 million, we would have — in effect, burned $1.7 million. So I think that a lot of people, when they’re looking at our operating statements, I don’t know that, that’s super clear to everybody. So if post the spinout of our clearing platform and PatentVest, 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 the equity position that we earned from co-founding Paulex 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.

And so we think we generated significant equity value that’s really not apparent in fiscal year 2025. But going forward, we’ve seen this leverage as being really unbelievable. And so I think that all of our things have $1 billion capabilities. And if we can launch 3 or 5 a year on a $6 million in OpEx base, I think we’re going to have really, really — we could drive a lot of really important shareholder value. So what can go wrong? Well, we are — this is not public, sure thing. It’s public venture, right? And so what I would say is that there’s a lot of interesting things going on that we face since we’ve started. There’s obviously a lot of macro and global risk. I have no idea how it’s going to turn out nor do I want to 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. So 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. And so we’re hoping to see that change hopefully soon. Obviously, execution risk, not only our execution risk, but obviously, our portfolio companies have to execute. And this distribution gap that we’re looking to solve is probably the biggest worry I have. And I’m not too worried about AI execution risk. We’re already seeing those tools work for us. And with regard to clinical and regulatory risk, those are always something to be faced with all the life science companies we’re involved with.

So the path forward is pretty straightforward. We’re now positioned to launch 3 to 5 high-quality companies a year. Again, that’s going to depend a lot on our distribution and how we can build that. We’ve got a lot of — we’ve talked about it in the past. We’re doing a lot of things in partnering with other distribution partners. And so we’re hoping to make that happen in addition to what we’re doing with spinning out the clearing platform. And we’re obviously going to spin out PatentVest as well and monetize that. And this cost scale efficiency improvement, I think, is only getting better as we get better at what we’re doing. And as always, shareholders retain preferred access to MDB deals. And so I want to thank you all for having faith in what we’re doing here at MDB.

And it’s been a really tough couple of years for us, watching our stock go down for the last couple of years since we took this company public. And so I’m going to use that for a second here to editorialize for 1 second. I know I’ve ran a bit over on this presentation. We’re up to 37 minutes, but I’m going to try and make this as quick as possible. So 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. And I think a lot of people have been disheartened. And I think part of what I will take credit for is this was a lot harder than we originally thought to get up and going. I could use the market backdrop as an excuse, but the reality was is that we thought we had it in the bag.

And when you looked at the — let’s call it, the batch of companies we did right before we — let’s call it, the grouping of companies we launched right before we went public, all of them went to $1 billion valuations. And if that had happened after we were public with our current batch, we would not be having this conversation right now. And I think that a lot of our investors were like, well, yes, you got lucky with prevention, one of the drugs worked and it’s sold and — but — or how much are 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 help make that happen. If you look at POS Biosciences, investors have had — it still trades, I think, for $1.5 billion valuation or so, maybe close to $2 billion.

I don’t know where it’s at right now. But investors have had multiple opportunities to make many multiples of their investment for where we took that public. And even when you look at the most challenging one, which was Cue Biopharma, this company achieved $1 billion valuation on the promise. The technology worked, but it also highlights the difficult parts of what we do, which is the company has got to execute. And that technology, we haven’t given up on it. We still think the technology is brilliant, and it should be broadly available to patients, but it’s had some challenges. But when I look at the current batch of companies that we have here today, when you look at all 4 of the principal assets we have, I really believe all those have $1 billion capability.

And obviously, if all of them hit $1 billion, it would be a crazy return to shareholders. I’m not saying that’s going to happen, and I don’t expect it to happen. But it would not surprise me if any one of them hit $1 billion valuation. And 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 going to find one of these companies to hit $1 billion valuation again and reward shareholders. So 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. So with that, I’m going to open it up to questions. I think, George, why don’t you come back…

George Brandon: Let’s just jump into it. [Operator Instructions] I’m going to start right off. Chris, I know you hit the positions we have the biggest stake in, but I just got a question on, can you talk a little bit about Cue, ClearSign and Beam and then also a question on Buda. That was unusual for us to do Buda. So can you just give a little bit of a view on those positions that many of our shareholders still hold?

Christopher Marlett: Yes, yes. So ClearSign has certainly been on that long commercialization journey. And that’s a company that Anthony knows much better than me. But from the — and it’s a very small position within our firm. But it — they have been on this commercialization journey and their unique burner technology is more relevant than ever. We’re going to be burning a lot more natural gas. And so I think that, that company is scaling. And I still think the prospects for that company are quite good. With regard to HeartBeam, HeartBeam did something that most people thought was impossible to get an FDA approval for a pocket 12-liter ECG, what’s not told in that story is that, that ECG is even better than a 12-liter in many ways.

And 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 companies. And so — but HeartBeam, we’re still super — we think everybody in the ECG space or health monitoring space, AI space should want to partner with HeartBeam because they have the most sensitive ambulatory ECG in the planet. Period. End of story. So we’re very hopeful that the team is going to 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, I addressed it in the shareholder letter. You can look at it, but 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. And I said, my God, you’re building a whole new category in a category that’s going to be everything. So when you look at Buda, they have the opportunity to be not only the fresh juice leader, which is not widely known that is you can’t really buy fresh juice at scale in most markets like Walmart and Kroger across the country. And — but this fresh movement is going big. And now ever since we started the thing, man, every one of these markets need a fresh element because all the shelf-stable processed foods are all going to get shipped by Amazon. And quite frankly, everything is going against processed foods.

So 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’re not — people go shopping a couple of times a week because they want fresh. They don’t want they don’t — they’re not eating preservative foods for the most part in Europe. So 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 the space, and it happens to be profitable. And so we’re super excited about it. And what else did I miss?

George Brandon: And Cue Bio.

Christopher Marlett: And Cue Bio. So Cue is struggling. I think they’ve struggled putting together a cohesive management and Board and getting that technology to commercialization. But that being said, they partnered with Boehringer Ingelheim and also partnered with ImmunoScape on 101. And now they’re about ready to put 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. But in fact, we believe that all 3 of those opportunities, those shots on goal are super valuable. And we’re really — we’re still just as bullish about the technology as possible as we’ve ever been, but they’ve had their challenges in getting the execution side of it done.

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

Christopher Marlett: Yes. So the great thing about Eosymes is that, again, much like if you think about mDBVat a $10 million OpEx level to create big opportunities, eXoZymes is the same way. Exosymes has about $10 million in OpEx to create huge opportunities. Now they’ve created now 2 gargantuan opportunities in NCT and cannabinoids. And they’re going to talk all about that, so I won’t go into it too deeply. But the combination of government grants and now that those opportunities being on the doorstep of commercialization. These aren’t science projects anymore. These are — so dilution is in our mind, is going to be relatively minimal because this is not like putting drugs in clinical trials. This is not — they can outsource manufacturing.

So it is super capital efficient. And 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 be — where they can generate — we’re talking about TAMs in the hundreds of billions with the 2 platforms they’re in. And 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 going to see that this could be the biomanufacturing. This could really be the start of a huge biomanufacturing revolution.

And in fact, the U.S. government, we can’t continue to outsource manufacturing, especially pharma and nutritional supplement manufacturing overseas. And so — this is a huge initiative. I think you’re going to see continued government grants coming to them. And so I just think that it’s in the right place at the right time. And now we just got to go out and tell the story.

George Brandon: A question on PatentVest. How systematically or structurally, how do you see that spin out? If I’m a shareholder of MDB, how is that going to impact me? Do you have an idea of what that path is on valuation and spin out? I know you said, hey, you weren’t really sure about what the valuation is going to be. But how — if I own a share of stock, what am I going to see as a shareholder?

Christopher Marlett: Well, the good news about both the clearing — MDB Direct, the clearing ops and PatentVest is we own 100% of both of them. So we’re starting with a much larger share of those than we do with the other companies we have ownership in. And — and so our objective is to do a round of financing to bring in partners. So we want to bring in folks, I can’t mention names, whether it be law firms, big corporate strategics or other strategics, and we’re talking to various strategics right now. Our goal is to get that funded and out of MDB as a company. Then we look — we’re going to look forward to taking it public in 2027 and the method in which we do that and how we do it, it’s not really completely formulated yet. But that’s going to be largely dictated by what we do on the partnering front here in the short run and funding it as its own independent division here shortly.

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

Christopher Marlett: It’s really interesting because the deal pipeline is great, and it’s — I can only see it getting better. So the biggest point is really our ability to get them sold, right? We have to get them packaged and sold. And so right now, with where we’re at, the biggest constraint isn’t the number of companies we’re seeing. It’s really going to be to work out the distribution side of the equation and get those and get that done. So I think once we do that, who knows how many we can do a year. So like I said, we — the biggest issue is solving the distribution thing. Obviously, our stocks, some have done okay, some haven’t done as good as we hoped. And obviously, if a couple of them work out pretty good, then that puts wind in the sails of everybody.

But we really need to add incremental distribution. Our community is still relatively small. We have — while we have a couple of thousand shareholders, we only have 675 active accounts. So it’s still very small. And we’re trying to broaden distribution so that we don’t have a couple of really large investors in our deals. We’re trying to broaden that a bit. And so as we do that, then our ability to get more of them done is going to increase. So 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.

George Brandon: Okay. So I got a question here that — it’s a good question, but I’m just going to 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.

Christopher Marlett: Yes. So I think to be 100% blunt, I think SaaS is going to be crushed by AI.

George Brandon: Go into that a little bit. How, why, and why do you think that?

Christopher Marlett: Yes. So just to give you an idea. We — just to give you one segment that’s a really, really big core thing of what we do. So — let’s take patentability, which is what is largely called prior art search, right? So any new vendor that comes up with a new idea wants to do a patentability or should do a patentability analysis. So heretofore, you would — maybe if you were — you would subscribe to a patent database, you would go out, you would do your own patentability analysis and search, you would maybe pay PatSnap $10,000 or $12,000 a year or $15,000 a year to go do that. And it would kind of get you part of the way there, maybe, right? And you kind of — you get a lot of data and you’d say, well, maybe this works.

An expert user would use PatSnap in maybe 5 or 6 other databases and then get to a really, really good patentability, but very few people did it because 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 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 a 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 1.5 hours, and it’s better. And that’s today. We’re doing that right now. I’m telling you it’s going to completely change the SaaS business. So these folks that are out there building AI solutions, curated AI solutions, I think they’re going to — 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. And so the curated data that we have that we’ve invested in for all these years is super valuable now because it’s got to be done behind a wall, right? And we don’t think that people should be putting their investments or their inventions into ChatGPT and doing this.

So that gives you a reason why I think SaaS is going to be — I think human in-the-loop IP development is the future. and we have a shot to be a 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.

George Brandon: Okay. Well, we’re at the end here, and I’m going to go ahead and turn it back to you and let you go ahead and close it out.

Christopher Marlett: All I can say is thanks. It’s been a very tough road the last couple of years since we’ve been public. But I hope that by listening to where we see things going that you have a bit more enthusiasm and you have the ability to kind of 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. We’re not — 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. But you just don’t give up. You never say die, you just keep going. And we — I appreciate everybody at the firm that’s done it. It’s not been easy. It’s been a lot of really difficult discussions. But that being said, when I look at what’s bubbling up from what we have, I’m super excited. So I’ll leave it at that.

Tony Dammicci: George?

George Brandon: You want me made the ending? 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.

Tony Dammicci: That’s all right. I’m ready to do it. So we’ll say thank you very much for attending today’s presentation. This will conclude our conference call.

George Brandon: All right. Thank you, guys. Appreciate it.

Tony Dammicci: Bye.