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

Thanks, Tony. Well, welcome, everyone. Thanks for joining today. I saw it was a pretty crazy day in the market. And so it's been a really interesting period in time to navigate these markets. And I just want to thank all of you that have been supporting us and getting behind us, and we've had a really good last few months as our platform takes shape and as our pipeline builds. And so we're very enthusiastic despite all of the backdrop of uncertainty. So well, one of the things I wanted to do today was talk a little -- do a little bit of a different approach to try and help to explain what we do at MDB, why we create value or how we create value and why we went public because I want to remind everybody that we did this for a very specific reason. And there was a big why, if you will, why we went public. But I also want to recognize that so many of you that have believed in us have lived through the stock really going down. And while the stock is down, we've lived through so many different markets before. And sometimes, when you call me where I talk to some of our shareholders, they think that I'm not too worried about things. One, I'm not super worried, but I don't like the stock being down either. So we really are in this together. But I want to also reiterate that we're not changing what we do just because the market's down. What we've done for a long time has worked, and we think it's going to work again despite the fact that times are changing. There's a lot -- fewer small public companies out there. The small public company market has…

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

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

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

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

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

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

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

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

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

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

Well, I think that it all comes down to how they're valued in the market. So right now, the companies that are profitable and growing in the Microcap sector are trading at big valuations. They're trading at last time we looked 1.15 PEG ratio. So if they're growing at 35%, they're going to be -- or 30%, they're going to be trading at 35 or so times earnings. And that's higher than what private equity firms are going to pay or and so it just makes sense for them to go public to raise additional capital and -- or if shareholders need liquidity or what have you. So we see it as that -- and there's very few of them out there when we did the screen of companies making a $1 million or more, growing at more than 10% and under $300 million in market value there was 34 companies. If you screen for foreign companies, we just did a foreign screen, and we had like 4,000 companies that fit that. And that's why a lot of these companies are going to want to come to NASDAQ. And they are you're going to see I think a delusion of these companies coming to NASDAQ. And I think we also have an opportunity to find some leaders in foreign markets that want to come public in the U.S. The other aspect of it is what's happened in the private equity, private debt and VC markets has been really amazing to watch. If you look at VC activity today, the big VCs, what are they doing? They're funding these big unicorn AI companies, they're putting in $100 million at a $5 billion valuation. And they're not doing anything like -- they're not putting $3 million or $4 million in a promising…

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

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

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

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

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

I'm not going to make any predictions on market value, but I think it could be -- other than to say that it could be seriously substantial. And here's why. So currently, the practice of law, there is not a lawyer you will meet in any practice of law. That isn't completely concerned about how AI is going to have an impact on their business. I can tell you that everything we do from drafting contracts to getting advice now is happening realtime with AI. And I can tell you that law firms are going to have a big, big dent in their revenue line from AI. So when you think about the disruption that's going to occur and how the practice of law is going to change, it is going to be a massive disruption. And I don't think anybody really disagrees with that. The interesting part about what we did, either we were smart or we were lucky is by believing that the ABS program in Arizona might be a great way for nonlawyers to be in the practice of law to align our interest with the clients and specifically focus on IP law because IP law is -- IP prosecution about a $25 billion a year business. that has not been a great business for the major law firms. But it's a $25 billion of your business that is a federal practice. So whether it's litigation or patent prosecution, it's a federal practice. Why is that important? It's because the -- a lot of the states and the lawyers in these other states don't want to lose business to an ABS law firm. But because it's a federal practice, you can -- anyone can practice patent law in any state. So the reality is, is when you…

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

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

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

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

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

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

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

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

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

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

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