Business Context and Reporting Period
Company: MDB Capital Holdings, LLC (MDBH)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Year ended December 31, 2025
Business Overview: MDB operates as a holding company and "public venture capital" platform. It co-founds and finances early-stage technology and life sciences companies ("partner companies") and provides investment banking and intellectual property services through its subsidiaries. Key subsidiaries include Public Ventures (a self-clearing broker-dealer), PatentVest (IP services), and MDB Minnesota One (M1, a biotech partner company). In November 2024, the company deconsolidated eXoZymes following its IPO, reducing MDB's ownership to 47% and accounting for it as an equity method investment.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 (in thousands) | 2024 (in thousands) |
|---|---|---|
| Total Operating Income | $4,911 | $2,157 |
| Total Operating Costs | $22,637 | $30,790 |
| Net Operating Loss | $(17,726) | $(28,633) |
| Net Income (Loss) Attributable to MDB | $(21,245) | $11,691 |
| Cash and Cash Equivalents | $13,217 | $20,437 |
| Total Assets | $63,740 | $71,976 |
| Total Liabilities | $3,161 | $1,903 |
| Equity Method Investment (eXoZymes) | $37,543 | $41,764 |
Liquidity: The company reported a net cash outflow from operating activities of $5.7 million in 2025. Working capital decreased to $13.2 million from $19.8 million in the prior year. Public Ventures maintained net capital of $8.7 million, significantly exceeding the $0.25 million regulatory minimum.
Material Changes vs. Prior Period
- Deconsolidation of eXoZymes: The most significant change was the deconsolidation of eXoZymes in November 2024. In 2024, this event generated a one-time gain of $39.3 million, which drove the prior year's net income. In 2025, the company recorded a $4.3 million equity loss from its remaining 47% stake in eXoZymes.
- Revenue Growth: Total operating income increased by 128% to $4.9 million, primarily driven by a 93% increase in fee income from the broker-dealer subsidiary ($4.3 million vs. $2.2 million) due to larger investment banking transactions.
- Expense Reduction: Total operating costs decreased by 26% to $22.6 million. This reduction was largely due to the removal of eXoZymes' operating costs (including $1.5 million in R&D) from the consolidated statements. Compensation expenses also decreased by $5.1 million.
- Net Loss: The company swung from a net profit of $11.7 million in 2024 to a net loss of $21.2 million in 2025, primarily due to the absence of the $39.3 million deconsolidation gain and the recognition of the equity method loss.
Guidance, Outlook, Risks, and Unusual Items
Outlook and Strategy: MDB continues to focus on its "Big Idea Pipeline," currently having two companies in active negotiations for partnership. The company plans to distribute securities of partner companies to shareholders as they go public. Management expects to continue funding operations through equity financings and revenue from Public Ventures.
Key Risks:
- Concentration Risk: The equity method investment in eXoZymes represents a significant portion of total assets ($37.5 million). Fluctuations in eXoZymes' stock price directly impact MDB's financial position.
- Regulatory and Political Risk: The company outsources significant back-office and support services to MDB Capital S.A. in Nicaragua. Executive Orders and sanctions regarding Nicaragua pose a risk of service disruption and increased costs.
- Partner Company Viability: Success depends on the ability of early-stage partner companies (like M1) to develop commercial products. M1 is currently in pre-clinical development with no revenue.
- Cybersecurity: As a financial institution and broker-dealer, the company faces ongoing risks of cyberattacks and data breaches, which could result in significant liability and reputational damage.
Unusual Items: The 2024 financials were heavily influenced by the $39.3 million gain on deconsolidation. The 2025 financials reflect the normalized operating loss of the holding company structure without the benefit of that one-time gain.
Investor Verification Checklist
- eXoZymes Valuation: Verify the current market price and trading volume of eXoZymes (NXOZ) to assess the fair value of MDB's $37.5 million equity method investment.
- Nicaraguan Operations: Review the status of U.S. sanctions and Executive Orders regarding Nicaragua to assess the risk to MDB's outsourced service model.
- M1 Milestones: Monitor the progress of MDB Minnesota One (M1) regarding its license agreement with Mayo Clinic, specifically the timeline for Phase II clinical trials and associated milestone payments.
- Liquidity Runway: Assess the company's cash burn rate ($5.7M operating outflow) against its cash balance ($13.2M) to determine the need for future capital raises.
- Broker-Dealer Compliance: Confirm that Public Ventures remains in compliance with SEC Rule 15c3-1 net capital requirements and any ongoing regulatory reviews mentioned in the filing.