MDBH

Market Backdrop

• The U.S. public microcap market (sub-$200 million market cap) is extremely out of favor: 25% of all U.S. public companies fall into this category, but they only represent 2% of total U.S. equity market capitalization.
• 70% of all current venture funding is allocated to large-cap AI-focused companies, leaving small early-stage companies severely underfunded in both public and private markets. The Russell Microcap Index has an average market cap of over $2.5 billion, making it unrepresentative of the sub-$200 million niche MDB operates in.
• Management believes eventual market rotation out of overvalued large-caps will benefit undervalued microcap assets, as microcap valuations are already near historic lows with limited further downside.

Strategic Shift

• MDB is pausing its prior plan to scale new company launches from 1 every 18 months to 3-5 per year, and is instead prioritizing monetization and value inflection for its four existing core assets to avoid shareholder dilution.
• The firm will now operate with a lean cost structure targeting $5 million to $6 million in annual operating expenses, aligned with its pre-IPO operating model, to maintain long-term sustainability without needing to raise additional capital.
• MDB's core strategy remains 'leverage without dilution': the firm plans to distribute realized value from its assets to shareholders rather than reinvesting aggressively into new unproven projects in the current weak market.

Core Asset Updates

• Public Ventures: MDB is in active discussions with 4-5 interested parties for a potential partnership or outright sale of its self-clearing platform, and targets closing a transaction by the end of Q3 2026. The platform is a unique asset, as few independent clearing platforms are currently available for acquisition or partnership.
• PatentVest: The firm has pivoted to position PatentVest as an AI-powered ABS patent law firm, pairing AI-driven workflow automation with experienced patent lawyers to deliver unprecedented efficiency. Similar AI-enabled legal ABS models have recently achieved $750 million pre-money valuations in venture funding.
• eXoZymes: The company has resolved core synthetic biology manufacturing scalability challenges, and is close to securing a strategic contract manufacturing partnership that will open the door to meaningful commercial discussions for multiple pipeline molecules, with tangible commercial inflection points expected soon.
• Paulex Bio: The clinical-stage biotech developing a potential beta cell expansion therapy for diabetes (synergistic with existing GLP-1 obesity and diabetes treatments) is on track to file its IPO registration statement and launch its IPO in Q4 2026, with core clinical data readouts expected in early 2027.

Portfolio Value Leverage

• MDB holds large meaningful positions in its high-upside portfolio assets, with significant embedded leverage for MDB shareholders relative to the current depressed share price. Management believes the combined potential value of the core assets is not reflected in MDB's current valuation.

• Management maintained its long-term outlook for the intrinsic value of MDB's core portfolio, but revised its near-term operating guidance to pause aggressive scaling of new company launches and focus on existing asset monetization.
• MDB targets closing a transaction for the Public Ventures clearing platform within the next quarter (Q3 2026), and expects to complete an independent spin-out financing for PatentVest in the near term.
• Management expects 1 to 2 new transactions (including the Paulex Bio IPO) in the second half of 2026, which will generate fee income to offset a portion of annual operating expenses.
• The firm's lean operating model targets total annual operating expenses of $5 million to $6 million, which is expected to be fully offset by transaction and fee income, enabling MDB to operate without shareholder dilution while waiting for core asset value inflection points.
• eXoZymes is expected to announce key commercial partnership updates in the near term, while Paulex Bio's core clinical data readout is expected in early 2027.

MDB Capital Holdings operates through four core wholly-owned and portfolio segments:

1. Public Ventures: 100% owned by MDB, operates a self-clearing broker-dealer platform built over five years on a lean budget. No specific quarterly revenue figures are provided, but the platform is currently underutilized as MDB has paused aggressive new company launches in the current market environment, and MDB is actively exploring partnership or sale options for the asset.
2. PatentVest: 100% owned by MDB, an AI-enabled legal technology platform focused on patent law. No specific quarterly revenue figures are provided; the business recently completed a strategic pivot to build an Alternative Business Structure (ABS) patent law firm in Arizona, and MDB is currently pursuing an independent spin-out financing for the asset to remove it from MDB's operating balance sheet.
3. eXoZymes: MDB holds 4.1 million common shares plus warrants (a majority equity stake position). No specific quarterly revenue contribution is provided; the synthetic biology company has been focused on resolving manufacturing scalability challenges, and is preparing to release operational and commercial updates in an upcoming standalone call.
4. Paulex Bio: MDB holds approximately 7.1 million common shares plus warrants. No specific quarterly revenue contribution is provided; the clinical-stage diabetes biotech is nearing the filing of its IPO registration statement, with clinical data expected in early 2027.

For the first half of 2026, MDB closed two investment banking transactions, including the Ticketplus IPO completed shortly after quarter-end, which offset a portion of the firm's overhead expenses.

• The overall unfavorable market environment for sub-$200 million microcap companies is the primary external risk outside of MDB's control, as it limits the ability to launch new companies at attractive valuations and can delay value creation for existing portfolio assets.
• All portfolio assets are early-stage, and there is no guarantee that expected commercial, clinical, or transaction value inflection points will be achieved as projected.
• Revenue and earnings are inherently lumpy for MDB's current operating model, with no steady recurring revenue stream to offset overhead in periods of low new transaction volume.
• Early-stage biotech and synthetic biology assets carry high clinical and commercial execution risk, and there is no guarantee that pipeline products will achieve regulatory approval or commercial traction.
• The current concentration of investment flows in large-cap tech and AI creates ongoing headwinds for investor attention and capital allocation to MDB's small-cap portfolio.

Q: How does MDB add value and help public portfolio companies like eXoZymes and Paulex Bio realize their full potential, beyond just launching them? / A: MDB leverages its 29 years of microcap experience to provide hands-on strategic guidance to portfolio companies. The team spends significant time helping management refine go-to-market and financing strategies, simplifies complex science to communicate value to investors, and leverages MDB's industry network to connect companies with potential commercial partners. Unlike traditional investment banks that only focus on closing transactions, MDB prioritizes long-term value creation for its portfolio companies and shareholders.

Q: How is MDB working to communicate its levered value story to new investors, given the current depressed share price? / A: Management has been active at microcap conferences, podcasts, and outreach to family office and RIA platforms to spread MDB's story. However, investor interest in microcaps is currently very low, as most capital is flowing to large-cap growth assets like NVIDIA. Management maintains consistent outreach efforts and is open to ideas from shareholders to improve the firm's visibility. It expects that value will be recognized once market rotation occurs.

Q: What is MDB's outlook for the smaller portfolio holding HeartBeam? / A: HeartBeam's ambulatory ECG diagnostic technology remains transformative, with the potential to save millions of lives if widely adopted. The company has shifted to the right strategy: instead of pursuing a capital-intensive independent launch that would heavily dilute shareholders at the current depressed valuation, it is now actively pursuing partnership opportunities with existing medical device companies that can integrate the technology into their existing distribution channels. This strategy extends HeartBeam's operating runway and creates significant upside for investors at current valuations.

Q: What challenges did eXoZymes face in its recent financing, and what is the path forward for the company's capital needs? / A: eXoZymes prioritized limiting shareholder dilution in its recent financing, raising only $6 million instead of a larger targeted amount. The company has annual operating expenses of around $10 million, and is pursuing non-dilutive funding options including strategic investments, spin-outs of individual platform assets, and grants to cover ongoing development. Once eXoZymes achieves commercial partnership value inflection points, future financings will be far less dilutive to existing shareholders.