As filed with the Commission on March 23, 2023

Registration No. 333-268318

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 3

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

MDB CAPITAL HOLDINGS, LLC

(Exact name of registrant as specified in its charter)

Delaware	6199	87-4366624
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

14135 Midway Road, Suite G-150

Addison, TX 75001

(310) 526-5000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christopher A. Marlett

Chief Executive Officer

MDB CAPITAL HOLDINGS, LLC

14135 Midway Road, Suite G-150

Addison, TX 75001

(310) 526-5000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Andrew Hudders, Esq. Golenbock Eiseman Assor Bell & Peskoe LLP 711 Third Avenue, 17th Floor New York, NY 10017 (212) 907-7300 Louis A. Bevilacqua, Esq. Bevilacqua PLLC 1050 Connecticut Avenue, NW, Suite 500 Washington, DC 20036 (202) 869-0888

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Non-accelerated filer ☐	Accelerated filer ☐	Smaller reporting company ☒
			Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This registration statement contains two forms of prospectus, as set forth below.

● Public Offering Prospectus. A prospectus to be used for the initial public offering by the registrant of class A common shares representing limited liability interests (the “Public Offering Prospectus”), through the selling agent and other broker-dealers named on the cover page of the Public Offering Prospectus.

● Security Holder Prospectus. A prospectus to be used in connection with the potential distribution by the Selling Security Holders of class A common shares representing limited liability interests (the “Security Holder Prospectus”).

The Public Offering Prospectus and the Security Holder Prospectus will be identical in all respects, except for the following principal parts which will detail the securities of and offering by the Selling Security Holders:

● they contain different front covers;

● they contain different tables of contents;

● the “Offering Summary” section is deleted from the Security Holder Prospectus;

● they contain different “Use of Proceeds” sections;

● the “Capitalization” and “Dilution” sections in the Public Offering Prospectus are deleted from the Security Holder Prospectus;

● they contain different “Plan of Distribution” sections;

● the “Plan of Distribution” section in the Security Holder Prospectus contains data on the Security Holders and their holdings of class A common shares; and

● the “Legal Matters” section in the Security Holder Prospectus deletes the reference to counsel for the selling agent.

The registrant has included in this registration statement, after the financial statements, a set of alternate pages to reflect the foregoing differences between the Public Offering Prospectus and the Security Holder Prospectus. The Public Offering Prospectus will exclude the alternate pages and will be used for the public offering by the Registrant. The Security Holder Prospectus will be substantively identical to the Public Offering Prospectus, except for the addition or substitution of the alternate pages and will be used for the resale offering by the Selling Security Holders.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS

Subject to Completion, Dated March 23, 2023

MDB CAPITAL HOLDINGS, LLC

833,333 CLASS A COMMON SHARES REPRESENTING LIMITED LIABILITY INTERESTS

This is the initial public offering of class A common shares representing limited liability interests of MDB Capital Holdings, LLC. We are offering the class A common shares at a public offering price of $12.00 per share, in a “best efforts” no minimum / 833,333 maximum share offering. The public offering price per share will be fixed for the duration of this offering. This offering will terminate on the 60^th day following effectiveness of the registration statement of which this prospectus forms a part (the “Offering Termination Date”), unless we sell the maximum amount of shares before that date or we decide to terminate this offering prior to the Offering Termination Date, which we may do at any time in our discretion. Investors will enter into a subscription agreement and their subscription amount will be deposited in an escrow account with Wilmington Trust, National Association. Subscriptions are irrevocable, and subscribers cannot withdraw their funds during the offering period. Once we decide to have a closing, the deposited investor funds will be released to us. There will be one closing. In the event we terminate the offering without a closing, all subscriber funds received in escrow will be promptly returned to subscribers without interest or offset in accordance with rules 10b-9 and 15c2-4 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

We are authorized under our operating agreement to issue common and preferred shares representing our limited liability interests. We have established two classes of common shares representing our limited liability interests, which we have denominated class A common shares and class B common shares. The rights of the holders of class A common shares and class B common shares are identical, except for voting and conversion rights. Each class A common share is entitled to one vote, and each class B common share is entitled to five votes per share. The class B common shares are convertible into class A common shares at any time, in an amount as determined by the holder, at the rate of one class B common share for one class A common share. Shareholders who hold class B common shares must convert their class B common shares into class A common shares before they may sell any of their shares in a public market. Prior to this offering, the holders of our outstanding class B common shares, being two persons, hold approximately 90.8% of the voting power of our actual outstanding capital equity, and those persons with our directors, executive officers, and 5% shareholders, and their respective affiliates, hold approximately 91.1% of the voting power of our actual outstanding capital equity. The corporate governance rights of the two classes of common shares are defined in our operating agreement, and are similar to the rights of a holder of stock in a corporation organized under Delaware law, which is why we have designated them as shares rather than LLC units or membership interests or other designations typical of limited liability companies. See “Description of Capital.” The common shares represent limited liability interests, and have pass through tax benefits under the U.S. federal income tax regulations. See “Certain Material U.S. Federal Tax Considerations.”

After completion of this offering, Christopher Marlett, our Chief Executive Officer and Chairman, and Anthony DiGiandomenico, our Chief of Transactions and a director, through ownership of all our outstanding class B common shares, will continue to control a majority of the voting power of our outstanding common shares. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of Nasdaq and eligible for certain exemptions from these rules. We will remain a controlled company until we have issued and outstanding 25,000,001 class A common shares, assuming no conversions of any class B common shares, at which time we will no longer be a controlled company because these two individuals will own less than 50% of the voting control of the company. This means, that after this offering, assuming all the shares are sold, we will have to issue an additional 21,237,702 class A common shares. We intend to rely on any such exemptions. See “Risk Factors – If the class A common shares are listed on Nasdaq, we will be deemed a “controlled company” under the listing rules because our class B common shares are held by two persons who have more than 50% control. As a controlled company, we will be exempt from many of the corporate governance obligations that other companies must follow when listing on Nasdaq” on page 29 for more information.

Prior to this offering, there has been no public market for our class A common shares. We intend to apply to list our class A common shares on The Nasdaq Capital Market, sometimes referred to as Nasdaq, under the symbol “MDBH.” No assurance can be given that our application will be approved or that an active trading market for the class A common shares will develop. We will not consummate and close this offering without a listing approval letter from the Nasdaq Capital Market.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012. As such, in this prospectus we have taken advantage of certain reduced disclosure obligations that apply to emerging growth companies regarding selected financial data and executive compensation arrangements. See “Prospectus Summary— Implications of Being an Emerging Growth Company.”

Digital Offering, LLC, or Digital Offering, is the lead managing selling agent, or selling agent, for this offering. The selling agent is selling our class A common shares in this offering on a best efforts, no minimum basis and is not required to sell any specific number or dollar amount of class A common shares offered by this prospectus, but will use its best efforts to sell such class A common shares. The selling agent may engage sub-agents to assist in the placement of the class A common shares offered hereby.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 11 of this prospectus to read about factors you should consider before deciding to invest in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per class A common share		Total
Public offering price	$	12.00	$	9,999,996
Selling agent commissions(1)	$	0.84	$	700,000
Proceeds to us, before expenses	$	11.16	$	9,299,996

(1) The selling agent will receive compensation in addition to the commissions. See “Plan of Distribution” for additional disclosure regarding the selling agent’s’ compensation and offering expenses.

In addition, we will issue to the selling agent warrants to purchase an aggregate number of class A common shares equal to eight percent (8%) of the number of class A common shares sold in this offering, exercisable for class A common shares at a per share price equal to 125% of the per share price of the class A common shares offered hereby. The registration statement of which this prospectus forms a part also registers the issuance of the class A common shares issuable upon exercise of such selling agent’s warrants (although the selling agent has agreed not to sell the warrants or any of the shares issuable upon exercise of the warrants until six months after the commencement of the offering). We do not intend to list the selling agent’s warrants on a national securities exchange or an over-the-counter quotation system. See “Plan of Distribution” for a description of these arrangements.

 

The date of this prospectus is                       , 2023

TABLE OF CONTENTS

	Page
Prospectus Summary	1
The Offering	9
Special Note Regarding Forward-Looking Statements	10
Risk Factors	11
Use of Proceeds	34
Dividend Policy	34
Capitalization	35
Dilution	36
Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Business	47
Management	66
Executive Compensation	71
Certain Relationships and Related Party Transactions	73
Principal Shareholders	74
Description of Capital	76
Certain Material U.S. Federal Tax Considerations	80
Sales of Restricted Securities and Rule 144	89
Plan of Distribution	89
Legal Matters	94
Experts	94
Additional Information	94
Index to Financial Statements	F-1

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission, or SEC. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We do not take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the class A common shares. Our business, financial condition, operating results, and prospects may have changed since that date.

For investors outside of the United States: we have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of class A common shares by the registered shareholders and the distribution of this prospectus outside of the United States.

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ABOUT THIS PROSPECTUS

Please read this prospectus carefully. It describes our business, our financial condition and results of operations. We have prepared this prospectus so that you will have the information necessary to make an informed investment decision.

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission, or the SEC. We have not, and the selling agent has not, authorized anyone to provide you with any information other than that contained in this prospectus. We are offering to sell, and seeking offers to buy, the securities covered hereby only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the securities covered hereby. Our business, financial condition, results of operations and prospects may have changed since that date. We are not, and the selling agent is not, making an offer of these securities in any jurisdiction where the offer is not permitted.

For investors outside the United States: We have not, and the selling agent has not, taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities covered hereby or the distribution of this prospectus outside the United States.

This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We believe that the data obtained from these industry publications and third-party research, surveys and studies are reliable. We are ultimately responsible for all disclosure included in this prospectus.

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus is a part were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR BUY ANY SHARES IN ANY STATE OR OTHER JURISDICTION IN WHICH IT IS UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE COVER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS

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PROSPECTUS SUMMARY

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our class A common shares. You should carefully read this prospectus in its entirety before investing in our class A common shares, including the sections titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the accompanying notes, provided elsewhere in this prospectus. Some of the statements in this prospectus constitute forward-looking statements. See the section titled “Special Note Regarding Forward-Looking Statements.”

The words “MDB,” “us,” “we,” the “Company,” the “holding company” and any variants thereof used herein refer to MDB Capital Holdings, LLC and our consolidated subsidiaries. Also, we refer to certain subsidiary companies that we founded or may found in the future and in which we have an ownership interest or will have an ownership interest in the future as “partner companies;” the use of the term “partner company,” “partner” or any similar term should not be interpreted or otherwise taken to suggest that any of the companies referred to as such, are in any form of legal partnership or similar arrangement with the Company or any other company or entity within the holding company structure represented by the Company and its partly and wholly owned subsidiaries or affiliates.

Overview

Our Approach

MDB was founded in 1997, originally operating as MDB Capital Group, LLC, for the purpose of engaging with companies holding visionary technology, inventors, and technology entrepreneurs. To maximize the impact of our actions and culture, under our business plan, we embark on each journey with a company at an early point, typically acting as founders and providing the initial rounds of capital, in the manner of a partner and usually before a specified management structure has been put in place. Part of our role as founders often includes locating the technology that will form the basis of the new enterprise. The technologies may be found in universities, in larger companies where it is not being used or understood, in start-up companies, and with inventors. Not only do we act as founders and providing the first capital rounds, we assist with structuring the plans for the company development, such as the steps from research and development to initial commercialization, the intellectual property strategy, business objectives, and financing. We refer to these subsidiary companies as “partner companies.”

Our model typically includes a two-step financing approach with our partner companies: we put in seed capital, as founders, and the first round of capital of between $5 to $10 million dollars to set the business on an operational foundation. Our plan is to then raise an additional amount of substantive capital to bring the technology closer to validation or to be able to commence commercialization, typically in the range of $20 to $60 million and often via a public offering or an alternative value realization. Our community of sophisticated individual investors with like-minded goals and values supports our model, with their capital, knowledge, connections, and expertise. We anticipate that value creation will be generated after years of patient ownership and corporate effort, and value realization might include any number of methods, such as continued holding and operating, initial public offerings, or IPOs, joint ventures, licensing, asset sales and merger transactions, depending on the particular business model and industry.

We believe that we successfully have used the private and public capital markets to finance growth companies. Being able to find disruptive technologies to develop, acting as corporate founders, owners, directors and management, and conducting investing activities for those companies in which we are strategically involved for the long term, we believe we have a different model of helping companies grow than that of the typical private venture capital model. We refer to our approach as public venture capital. We find the technology, and then we work to analyze the technology leadership position and survey the marketplace so as to establish a research and development and intellectual property development strategy to create a dominant position in the distinct technology vertical. Then we create the basic company, we set up its management, we define its business plan, we nurture its enterprise, and we provide its financings in its early stage rounds of private funding, and then we likely will act as the underwriter or selling agent for its later financings, IPO, or disposition. It is our plan to remain involved with our partner companies for the long term. Where there is an IPO, we stay on for several years thereafter, by being members of the board, having consulting agreements, providing strategic business advice, and participating in, advising on or facilitating further financing rounds. We believe, most importantly, that one gauge of the partner company success is that the partner company successfully completes public and private follow-on offerings or other value realization event so as to continue supporting the research, development, growth and marketing of their technologies’ potential.

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Our public venture business model does not rely upon the receipt of operating cash flows from our partner companies. We anticipate that our partner companies, while we are invested in them and they are developing their businesses, will not generate revenues or positive cash flow. To the extent our partner companies generate any cash from operations, they will retain the funds to develop their own businesses. Our overall day to day operations will rely on cash on hand, cash flow from the operation of Public Ventures and PatentVest, and our ability to generate cash from capital raising activities to finance our overall operations and fund the partner companies. If we need capital to fund current and new partner company relationships, we will seek to raise additional capital. If we are unable to find ways of monetizing our holdings or to raise additional capital on attractive terms, we may face liquidity issues that will require us to curtail our new business efforts, constrain our ability to execute our business strategy, and limit our ability to provide financial support to our existing partner companies. We may also finance our partner companies through their securities offerings or selling, licensing, or joint venturing their businesses.

The operating income for the year ended December 31, 2022 was $1,218,966 and the operating loss for the year ended December 31, 2021 was $9,833,998. The net loss attributable to MDB Capital Holdings, LLC for the year ended December 31, 2022 was $5,314,053 and for the year ended December 31, 2021 was $15,100,343.

Our Broker-Dealer Business

We operate a registered broker-dealer and conduct financing activities through Public Ventures, LLC, or Public Ventures. Our broker-dealer is the backbone of our community-oriented financing approach. Public Ventures is a registered broker-dealer (CRD#: 42677/SEC#: 8-49951) under the Exchange Act and a member of Financial Industry Regulatory Authority, Inc. (“FINRA”). This company, under its predecessor name, MDB Capital Group, LLC, has conducted private and public financing activities for more than twenty-five years, for a wide range of clients, in diverse sectors of the economy. However, one theme of its clients has always been involvement in technology. We intend to leverage the lessons learned during our long operating history to create processes, due diligence reviews, deal prioritization, rating systems, and reports that will allow the investor community that adheres to the Public Ventures approach to appropriately evaluate their investment risk and to foster informed decision making.

Public Ventures is in the process of expanding its business to include securities clearing operations, oriented to the small and medium capital sized companies, where the larger clearing firms do not appear to be interested. Having a FINRA licensed, self-clearing broker-dealer will enable us to structure and place or underwrite community based financing transactions and provide securities clearing services so that investors can trade, clear, and settle stocks in the partner companies and other small and micro-cap company securities. Our objective is to create a high-end service platform that will make investing in the small and micro-cap segment more accessible and efficient for our largely accredited investor community.

The strategy of this business is to foster venture-stage businesses that are supported and financed by a community of like-minded investors and entrepreneurs experienced in the development of successful companies that have a long-term investment horizon. We envision developing a subset of this close-knit community of long-term public venture investor that will also be considered “Members.” Member involvement may include suggesting start-up and developing companies as potential investment opportunities and partner company candidates, making investments in these entities and other targeted companies, and consulting with our partner companies to help them grow into tomorrow’s leaders.

Our Patent and Intellectual Property Business

Another part of our operations includes PatentVest, Inc., or PatentVest. This company is in the process of expanding its business operations in the restructured holding company. We believe PatentVest can become the first venture invention and commercialization intelligence platform, created to assist technologists, advisors, venture capital investors, and established companies optimize technology commercialization. Our process takes in information from our proprietary patent database and transforms the information about inventions and intellectual property from a complex legal process into a manageable, measurable business process. The PatentVest process clearly defines the boundaries of an invention by providing context for previously developed ideas and analyzes how the invention, and therefore patent claims, differ from the discovered prior art in order to rationalize the essential distinctions that are the key value drivers. Understanding these boundaries, as well as how protectable and valuable these boundaries are, is essential to better guide strategic business and patentability decisions. In our experience, this PatentVest process answers the most important questions for a technology platform: how to innovate, how to improve its ideas, and how to deploy these ideas where they matter most.

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PatentVest is a licensed law firm in Arizona through the newly established Alternative Business Structure (ABS) program of that state. We believe that the ABS program will enable PatentVest to deliver a cohesive solution to new technology companies. PatentVest, as a law firm, will focus on intellectual property matters, including patent prosecution, intellectual property protection and licensing.

We believe that PatentVest will provide several new investment opportunities for the Public Ventures community and will serve as the team to execute the intellectual property strategies for our partner companies.

Our Current Partner Company

Invizyne Technologies, Inc. or Invizyne, a partner company, was created in early 2019 with the vision of simplifying nature by using nature’s building blocks to create molecules of interest. Invizyne has differentiated technology underlying its unique synthetic biology platform which potentially solves the inherent production bottlenecks of certain legacy technologies. The promise of synthetic biology, we believe, has no bounds. If Invizyne’s technology platform is successful at an industrial scale, we believe that it could significantly impact several industries by enabling the exploration of a large number of molecules and properties found in nature. For example, we believe that therapeutic molecules found in nature could be tested for efficacy and quickly created and scaled. Examples of where this has been important include with respect to multiple cannabinoids and other natural compounds, quick replication of novel properties of rare chemicals found in nature, creation of natural flavors and fragrances to naturally enrich food, and the sustainable creation of fuel from renewable energy sources.

MDB CG Management Company

MDB CG Management Company, Inc., or MDB Management, is principally an “administrative” entity whose purpose is to conduct, and wherever possible, to consolidate shared services/resources, for our US-based operations. This includes entering into service agreements that are broadly applicable to one or several of the group entities, hiring employees and independent contractors for the wholly owned entities within the group, performing certain unregulated administrative tasks, conducting unregulated recording keeping, leasing office premises, and offering employee benefit programs, such as healthcare and 401K plans.

Corporate Reorganization

MDB Capital Holdings, LLC (“MDB,” “MDB Holdings” or the “Company”), a Delaware limited liability company, was formed on August 10, 2021, to become the parent of MDB Capital Group, LLC. On January 10, 2022, MDB Capital Group, LLC filed a Certificate of Amendment with the Texas Secretary of State to change its name to Public Ventures, LLC (“Public Ventures”). On January 14, 2022, Public Ventures distributed 100% of its equity interests in PatentVest and Invizyne to its members in proportion to their respective interests. On January 15, 2022, Public Ventures filed with the Internal Revenue Service to be treated as a corporation for federal income tax purposes. On January 16, 2022, the members of Public Ventures contributed their entire interests in the equity of Public Ventures, Invizyne and PatentVest to MDB Holdings, as result of which MDB Holdings became the new parent holding company, holding 56.4% of Invizyne and 100% of each of the other two companies. In exchange for these contributed interests, 5,000,000 Class B common shares were issued in connection with the reorganization. There was no effective change in the beneficial ownership of Public Ventures as a result of this transaction. As part of the reorganization, MDB Holdings established a wholly owned management company subsidiary called MDB CG Management Company, Inc. (“MDB Management”).

Accounting Predecessor

Public Ventures (formerly known as MDB Capital Group, LLC) and its subsidiaries, which together constitute our predecessor for accounting purposes, were under common control. As a result, their contribution to MDB Holdings was recorded as a combination of entities under common control, whereby the assets contributed and liabilities assumed are recorded based on their historical carrying values. After the contribution of the predecessor’s business and net assets on January 16, 2022, we have retroactively reported our financial statements to include the historical results of our predecessor, Public Ventures. This report includes information pertaining to periods prior to the closing of the business combination. In January 2022, Public Ventures, PatentVest, and Invizyne were contributed to the Company. For comparative purposes, the prior reporting company, Public Ventures, is presented for periods before January 1, 2022, and referred to in statements as the “predecessor”.

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Corporate Structure

The following diagram displays our corporate structure as of the date of this prospectus:

 

. * The dotted line in the table above, represents a contract to supply services. The solid lines in the table above represent ownership

MDB Holdings is a limited liability company, established through a reorganization of several companies, that was initially funded with the proceeds from a private placement consummated in June 2022. Through this offering, MDB Holdings will become a publicly traded partnership. Our securities will represent limited liability interests, and governed by the laws and regulations applicable to pass-through entities under the Internal Revenue Code. MDB Holdings currently has three wholly-owned subsidiaries: Public Ventures; PatentVest; and MDB Management. MDB Holdings and currently has a majority-owned partner company, Invizyne. MDB Management has an out-source service contract with MDB Capital S.A., an affiliated company, where services are provided to the different companies within the holding company on an out-source, as requested basis.

Two Class Shareholder Structure; class B common share control

We currently have two classes of equity representing our limited liability membership interests, which we have in our operating agreement as common shares and preferred shares. The common shares are divided into two classes, the class A common shares and class B common shares. The total number of shares of all classes currently authorized is 110,000,000 shares, consisting of (i) 10,000,000 preferred shares, and (ii) 100,000,000 common shares, of which 95,000,000 shares are denominated as class A common shares and 5,000,000 shares are denominated as class B common shares. As of December 31, 2022, there were 7,628,966 common shares outstanding consisting of 2,628,966 class A common shares and 5,000,000 class B common shares. No preferred shares have been issued or are outstanding.

The rights of the holders of class A common shares and class B common shares are identical, except with respect to voting and conversion rights. Each class A common share is entitled to one vote. Each share of class B common share is entitled to five votes and is convertible at any time into one class A common share. Prior to the date of this prospectus, the holders of our outstanding class B common shares, being two persons, hold approximately 90.8% of the voting power of our actual outstanding capital equity. Shareholders who hold class B common shares must convert their class B common shares into class A common shares before they may sell any of their shares in a public market.

Delaware law is very flexible in how the rights of limited liability interests of a limited liability company may be established. We have designated our securities as common shares and preferred shares representing our limited liability interests, and subdivided the common shares into two classes. The corporate governance rights of the two classes of common shares are defined in our operating agreement, and generally, they are similar to the rights of a holder of stock in a corporation organized under Delaware law, which is why we have designated them as shares rather than LLC units or membership interests or other designations typical of limited liability companies.

In our operating agreement we have adopted governance and operational provisions that are similar to the rights of a common shareholder in a typical Delaware corporation. For example, the following are typical terms of a stock corporation which we have adopted for our common shares representing limited liability interests: (i) the fiduciary duties of our directors and officers are the same as a Delaware stock corporation, (ii) our shares are fully paid and non-assessable like those of a Delaware stock corporation, (iii) there are no pre-emptive rights, (iv) no consent of the Company is required to become a shareholder of MDB Holdings, (v) holders of our common shares have the full range of inspection rights of our corporate records like shareholders of a Delaware stock corporation, (vi) meetings of the shareholders of MDB Holdings are similar to those of a Delaware stock corporation, including the fixing of a meeting date, notice requirements for a meeting, quorum requirements, voting procedures and inspector of elections provisions, (vii) the operation of our board of directors follows the law provisions of a Delaware stock corporation, and (viii) the indemnification of directors and officers follows the law provisions applicable to a Delaware stock corporation. Because we are a limited liability company, which will be treated as a partnership under the Internal Revenue Code and related regulations, the holders of our common shares will be taxed on the basis of the laws and regulations applicable to pass-through entities for federal tax purposes. Pass-through taxation means that any profits or losses earned by MDB Holdings pass through the business and on to the holders of the shares representing the limited liability interests.

Christopher Marlett, our Chief Executive Officer and Chairman, and Anthony DiGiandomenico, our Chief of Transactions and a director, hold all our outstanding class B common shares, and will continue to control a majority of the voting power of our outstanding common shares. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of Nasdaq and eligible for certain exemptions from these rules. We will remain a controlled company until we have issued and outstanding 25,000,001 class A common shares, assuming no conversions of any class B common shares, when they no longer own 50% or more of the voting control of the company. We intend to rely on any such exemptions.

The fact that the class B common shares have a right to five votes per class B common share on all matters presented for a vote to the shareholders, including in the vote for directors, and the fact that the class B common shares currently have a majority ownership position of all the common shares, means that they have an anti-takeover effect, because it would be difficult for an insurgent to overcome the authority that the class B common shares has in the governance of the Company. The class B common shares also means that the holders will have a control position over the Company in determining the affairs of the Company, including the selection of the members of the board of directors and officers, use of the proceeds of this offering and other income of the company, determination of various policies by which the Company is governed, and any other matter that is determined directly or indirectly by the shareholders.

Impact of the COVID-19 Pandemic on Our Business

The COVID-19 pandemic has prompted national, regional, and local governments, including those in the markets that the Company operates in, to implement preventative or protective measures to control its spread. As a result, there have been disruptions in business operations around the world. As our operations may largely be conducted remotely and are largely office and service work based and not involved in manufacturing or direct face to face client service contacts, we have not been impacted significantly by the COVID-19 pandemic.

While the Company will continue to navigate the financial, operational, and personnel challenges presented by the COVID-19 pandemic, the full impact of COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the potential uncertainty related to (and proliferation of) new strains, and related actions taken by federal, state, local and international government officials, to prevent and manage the spread of COVID-19. All of these efforts are uncertain, out of our control, and cannot be predicted at this time.

Impact of Ukrainian Conflict

Currently, we believe that the conflict between Ukraine and Russia does not have any direct impact on our operations, financial condition or financial reporting. We believe the conflict will have only a general impact on our operations in the same manner as it is having a general impact on all businesses that have their operations in North America as a result of international sanctions and embargo regulations, possible shortages of goods and goods incorporating parts that may be supplied from the Ukraine or Russia, supply chain challenges, and the international and US domestic inflationary results of the conflict and government spending for and funding of our country’s response. We do not believe we will be targeted for cyber-attacks in connection with the conflict, but as a financial institution, we are aware that we may be a general target for cyber-attacks. We have no operations in the countries directly involved in the conflict or are specifically impacted by any of the sanctions and embargoes, as we principally operate in the United States. We do not believe that the conflict will have any impact on our internal control over financial reporting. Other than general securities market trends, we do not have reason to believe that investors will evaluate the company as having special risks or exposures related to the Ukrainian conflict.

Recent Developments

On June 8, 2022, the Company completed the first closing of a private placement, closing on 2,517,966 class A common shares, for gross proceeds of $25,179,660. On June 15, 2022, we completed the second closing of the private placement, closing on an additional 11,000 class A common shares, for gross proceeds of $110,000. The Company received total gross proceeds from the two closings of approximately $25,289,660, which will be used for development of the current partner companies, setting up new partner companies, and our general corporate and working capital requirements. The Company also issued warrants to purchase 18,477 class A common shares to two sales agents engaged by the Company that are registered broker-dealers, which are exercisable for 10 years at $12.00 per share.

All the investors in the private placement are locked-up until the commencement of trading of our class A common shares on The Nasdaq Capital Market. We intend to list the class A common shares on The Nasdaq Capital Market, but no assurance can be given that our application will be approved or that an active trading market for the class A common shares will develop. We will not consummate and close this offering without a listing approval letter from the Nasdaq Capital Market.

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Summary of Risk Factors

Our business is subject to a number of risks and uncertainties, including those risks discussed at length under the heading “Risk Factors” starting on page 11 hereof. These risks include risks in addition to those that are briefly noted below. Investing in our Company and its securities involves a high degree of risk. The following is a summary of some of the principal risks we face.

-An investment in the Company will be an interest taxed as a partnership interest, therefore you may have taxable income whether or not you receive any cash distributions.

-If we are treated as a corporation rather than a partnership, and there is no pass through of losses to the investors as currently intended, the value of the class A common shares may be adversely affected.

-Allocations of income and loss may be re-determined by the IRS if the IRS determines that the operating agreement and our business do not have substantial economic effect. Our structure is subject to potential legislative, judicial or administrative change and differing interpretations, possibly on a retroactive basis.

-Investors will receive Schedule K-1 reports indicating their profit and loss amounts for completing their annual tax return; however these reports may be distributed after April 15 of the following year.

-We believe that our partner company model of owning and developing growth companies has been successful in the past, however, there is no assurance that going forward we will be successful in selecting our partner companies with future potential, nurturing them with capital funding and management, and taking them public.

-We may require additional capital to support our business operations and to fund our partner companies; additional capital may not be available when needed. Where we sell additional equity or equity linked securities, there will be dilution of prior investors’ interest in the Company.

-Our partner companies likely will need to raise additional capital to fund their operations from time to time. We may not be able to fund some or all of these amounts, and the amounts may not be available from third parties on acceptable terms, if at all.

-Our model and our overall business success and return on investment depends on our partner companies being successful in their respective fields of operation and the marketplace for their products they will address.

-Our business strategy and operations will rely on our ability to identify and retain appropriately qualified personnel for the holding company and the various subsidiaries.

-Developing and protecting the intellectual property rights of our partner companies and avoiding infringement will be paramount to the success of our partner companies. Protecting such intellectual property may be costly and complicated, and ultimately may not be fully adequate to create or protect a competitive position.

-Collaboration agreements of various sorts, by our partner companies, such as with respect to research, testing, clinical trials, manufacturing and distribution, will be important to their respective businesses. Their inability to enter into collaboration agreements as needed, or if any collaborations that the partner companies undertake are not successful, may adversely impact their respective businesses.

-Invizyne may not be successful in its efforts to use its proprietary synthetic biological platform to build a pipeline of products.

-The synthetic biology market is a rapidly growing and changing market, and if Invizyne is unable to keep up to date with developments, its business may be adversely affected.

-The market, including clients and potential investors, may be skeptical of the viability and benefits of Invizyne’s pipeline of products because they are relatively novel and are based on complex technology.

-If we do not identify the full range of patent opportunities relevant to a client’s intellectual property portfolio, our reputation will be harmed and we may be liable for service failure.

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-If clients do not agree that the patents opportunities identified in our reports are relevant to their businesses, we will have difficulty retaining and attracting new clients, and our operating results will be harmed.

-We believe patent analysis is a highly competitive business, and if we fail to develop widespread brand awareness cost-effectively, our business may suffer.

-Public Ventures plans on conducting offerings where we will act as an underwriter, and thus we will be subject to underwriter liability.

-As a broker-dealer, Public Ventures will have to expend considerable resources on maintaining adequate compliance practices. The failure to maintain required compliance practices or otherwise be in regulatory compliance will result in fines, sanctions and possibly the curtailment of operations.

-The clearing operations of Public Ventures will require contractual arrangements with several key industry entities, which, if not followed, will require us to terminate our business.

-Public Ventures will have to maintain adequate capitalization levels to conduct its broker-dealer and clearing businesses. Settlement bank services are difficult to arrange, without which Public Ventures will not be able to pursue a clearing business.

-We plan to operate as a company not regulated under the Investment Company Act of 1940. We may have to buy, sell or retain assets when we would otherwise not wish to do so in order to avoid registration under the Investment Company Act.

-Invizyne may face unique regulatory hurdles because of the novelty of its bio-synthesized compounds. Because its compounds are novel, Invizyne will have to perform tests for safety, use, and claim validation.

-To the extent that Invizyne pursues medical-related products, it will be subject to the full range of regulation by the Food and Drug Administration (“FDA”) and other medical related regulatory requirements.

-PatentVest is licensed to offer legal services under Arizona law that it plans to offer as part of the package of intellectual property service offerings of PatentVest, which licensing imposes on those services the responsibilities and obligations of a law firm under the ethical and legal provisions of the State of Arizona.

-One of our subsidiaries, Public Ventures, is subject to Securities and Exchange Commission and FINRA regulation, which if not followed may result in fines, limitations on activity and financial impairment.

-The collection, processing, use, storage, sharing and transmission of personal information and other sensitive data are subject to stringent and changing state, federal and international laws, regulations and standards and policies and could give rise to liabilities as a result of our failure or perceived failure to protect such data, comply with privacy and data protection laws and regulations or adhere to the privacy and data protection practices that we articulate to our clients. Cyberattacks and other security breaches or disruptions suffered by us or third parties upon which we rely could have a materially adverse effect on our business, harm our reputation and expose us to public scrutiny or liability.

-Control by management may limit your ability to influence the outcome of director elections and other transactions requiring class A common shareholder’s approval.

-If the class A common shares are listed on Nasdaq, we will be deemed a “controlled company” under the listing rules because our class B common shares are held by two persons who have more than 50% control. As a controlled company, we will be exempt from certain of the corporate governance obligations that other companies must follow when listing on Nasdaq.

- As a relatively small-capitalization company, our class A common shares may experience greater stock price volatility, extreme price run-ups, large spreads in bid and asked prices, lower trading volume and less liquidity than large-capitalization companies.

-The dual class structure of our currently issued equity securities may adversely affect the trading market for our class A common shares.

-The dual common share structure and existence of our registered broker-dealer subsidiary may delay or prevent takeover attempts of our Company.

-We currently have limited accounting personnel with the background in public company accounting and reporting. We will have to add personnel and devote personnel and financial resources to meet our reporting obligations as a publicly listed company.

-Except for the holders of 171,078 class A common shares, none of the other shareholders of the class A common shares are party to any contractual lock-up agreement or other contractual restrictions on transfer. Their shares are being registered for resale at the same time as the Offering to which this prospectus relates.

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Corporate Information

Our executive offices are located at 14135 Midway Road, Suite G-150, Addison, TX 75001. Our phone number is (310) 526-5000. Our website address is www.mdb.com. The information on our website is deemed not to be incorporated in this prospectus or to be part of this prospectus.

JOBS Act

We will be treated as an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. As such, in this prospectus we have elected to take advantage of certain reduced disclosure obligations that apply to emerging growth companies regarding selected financial data and executive compensation arrangements. We expect to continue to rely on the emerging growth company reduced disclosure and reporting obligations once we are a public company.

Implications of Being an “Emerging Growth Company”

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act. As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not “emerging growth companies” such as not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. We could remain an “emerging growth company” for up to five years, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (b) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act which would occur if the market value of all our class A common shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period.

Summary Consolidated Financial and Other Data

The following tables summarize our consolidated financial data and other data. The summary consolidated statements of operations data for the years ended December 31, 2022 and 2021, respectively and consolidated balance sheet data as December 31, 2022 and 2021, have been derived from our consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future. You should read the following summary consolidated financial data and other data below in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

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	Year Ended December 31, 2022			Year Ended December 31, 2021
Operating income (loss):
Unrealized gain (loss) on investment securities, net (from our licensed broker dealer) (Notes 1 and 2)	$	15,433		$	(13,020,834	)
Realized (loss) gain on investment securities (from our licensed broker dealer)		(7	)		404,169
Gain on distributed investment securities to members’ (from our licensed broker dealer)		-			2,414,093
Fee income (from our licensed broker dealer)		1,115,001			-
Other operating income		88,539			368,574
Total operating income (loss), net		1,218,966			(9,833,998	)
Operating costs:
General and administrative costs		6,973,196			5,636,379
Research and development costs		348,085			454,454
Total operating costs		7,321,281			6,090,833
Net operating loss		(6,102,315	)		(15,924,831	)
Other income (from U.S. Treasury Bills)		227,249			251,861
Loss before income taxes		(5,875,066	)		(15,672,970	)
Income tax expense		-			-
Net loss		(5,875,066	)		(15,672,970	)
Less net loss attributable to non-controlling interests		(561,013	)		(572,627	)
Net loss attributable to MDB Capital Holdings, LLC	$	(5,314,053	)	$	(15,100,343	)

	December 31, 2022		December 31, 2021
ASSETS
Cash and cash equivalents	$	4,952,624	$	6,225,458
Total other assets		20,748,447		2,023,853
Total assets	$	25,701,071	$	8,249,311
LIABILITIES AND EQUITY
Total Liabilities	$	2,592,063	$	1,487,974
Equity		22,640,343		6,239,168
Non-controlling interest		468,665		522,169
Total equity		23,109,008		6,761,337
Total liabilities and equity	$	25,701,071	$	8,249,311

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THE OFFERING

Class A Common Shares Representing Limited Liability Interests Offered:	833,333 class A common shares. The shares are being offered on a no minimum, 833,333 share maximum best efforts basis.
Offering Price per Class A Common Share Representing Limited Liability Interests:	$12.00 per share
Class A and Class B Common Shares Representing Limited Liability Interests outstanding prior to this offering:	2,628,966 class A common shares and 5,000,000 class B common shares
Class A and Class B Common Shares Representing Limited Liability Interests to be outstanding after this offering:	3,462,299 Class A common shares and 5,000,000 Class B common shares
Selling Agent’s Warrants:	We have agreed to issue to Digital Offering, LLC, the selling agent (or its permitted assignees), warrants to purchase up to 66,667 of our class A common shares, equal to 8.0% of the total number of class A common shares sold in the offering, at an exercise price equal to $15.00, or 125% of the public offering price of the class A common shares sold in this offering. The selling agent’s warrants will be exercisable at any time, and from time to time, in whole or in part, commencing six months after the closing of the offering and expiring five (5) years from commencement of sales in the offering and will have a cashless exercise provision. The registration statement of which this prospectus forms a part also registers the class A common shares issuable upon full exercise of the selling agent’s warrants. See “Plan of Distribution” for more information.
Use of Proceeds:	We estimate that the maximum net proceeds to us from this offering will be approximately $8.7 million. We intend to use the net proceeds of this offering (1) to expand the Public Ventures clearing operations, to fund the initial operations of the Arizona law firm and marketing PatentVest, (2) to locate one or more technologies to form the basis of a partner company and provide seed and an initial round of financing, and (3) for working capital and other general corporate purposes. See “Use of Proceeds.”
Risk Factors:	You should read the “Risk Factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in our class A common shares.
Lock-Up	We and all of our directors, director nominees and officers have agreed with the lead selling agent, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our class A common shares, class B common shares or securities convertible into or exercisable or exchangeable for our class A or class B common shares for a period of (i) 180 days after the closing of this offering in the case of our company and (ii) 12 months after the date of this prospectus in the case of our directors and officers. See “Plan of Distribution” for more information.
Proposed Trading Market and Symbol:	In connection with this offering, we intend to file an application to list our class A common shares under the symbol “MDBH” on the Nasdaq Capital Market. We will not consummate and close this offering without a listing approval letter from the Nasdaq Capital Market.

Unless we indicate otherwise or the context otherwise requires, all information in this prospectus relating to the class A common shares:

● excludes 5,675,000 class A common shares underlying the assigned restricted share units and other awards under the 2022 Equity Incentive Plan as of December 31, 2022;

● excludes 18,477 class A common shares underlying the warrants issued to the selling agents in connection with the private placement by MDB in June 2022, and excludes up to 66,667 class A common shares that may be subject to the warrants to be issued to the selling agent in connection with this offering; and

● excludes 982,241 class A common shares that may be the subject of future awards under the 2022 Equity Incentive Award Plan as of December 31, 2022.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” All statements other than statements of historical facts contained in this prospectus may be forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “continues,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “would” or “should” or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this prospectus, and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies, future acquisitions and the industry in which we operate.

These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. These forward-looking statements are based on assumptions regarding our present and future business strategies and the environment in which we operate. Important factors that could cause those differences include, but are not limited to:

● our future financial performance, including our expectations regarding our net revenue, operating expenses, and our ability to achieve and maintain future profitability;

● our business plan and our ability to effectively manage our overall operations and growth, particularly in respect of our partner companies;

● our ability to anticipate trends, growth rates, and challenges in our securities brokerage and related businesses as broker dealer regulation evolves;

● our ability to evaluate potential partner companies and assess their potential growth and the challenges of their business;

● our ability to evaluate the product and service development of the partner companies, product and service acceptance of the partner companies, and the inherent uncertainty of their product and service development and commercialization;

● regulatory, legislative and judicial developments that impact our businesses and those of the partner companies and our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business and those of the partner companies;

● our ability to protect the intellectual property of the Company, including the intellectual property of the partner companies;

● our relationships with our clients and service providers;

● our ability to identify, complete and integrate potential strategic acquisitions of complementary companies, products, services, or technologies and our ability to successfully integrate such companies or assets into our overall structure;

● general economic conditions and trends;

● increased expenses associated with being a public company;

● our ability to attract and retain qualified personnel;

● our ability to raise equity and debt capital to fund our operations and growth strategy, including possible developmental businesses and acquisitions; and

● future revenue being lower than expected;

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These above factors should not be construed as exhaustive and should be read with the other cautionary statements in this prospectus.

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this prospectus. The matters summarized under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this prospectus could cause our actual results to differ significantly from those contained in our forward-looking statements. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods.

In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this prospectus speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments, except as required by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

RISK FACTORS

Investing in our class A common shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, before making a decision to invest in our class A common shares. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, operating results, financial condition and future prospects could be materially and adversely affected. In that event, the market price of our class A common shares could decline, and you could lose part or all of your investment.

Risks Relating to Holding Company Taxation

You may be subject to U.S. federal income tax on your share of our taxable income, regardless of whether you receive any cash distributions from us.

The class A common shares are securities issued by a limited liability company and represent limited liability interests.

Under current law, so long as certain conditions are satisfied (see “Certain Material U.S. Federal Tax Considerations — Classification as a Partnership”), we should be treated, for U.S. federal income tax purposes, as a partnership and not as a corporation. As such, MDB will generally not be subject to U.S. federal income tax. Instead, each shareholder of MDB will be required to take into account its allocable share of each item of MDB’s income, gain, loss, deduction or credit, whether or not MDB distributes any cash to it, including distributions or dividends MDB receives from its corporate entities (i.e., in partner companies). Consequently, it is possible that in any year, a shareholder’s tax liability arising from MDB could exceed the distributions made to him, her or it by MDB. Thus, there may be years in which a shareholder’s tax liability exceeds its share of distributed cash from MDB. If this were to occur, a shareholder would have to use funds from other sources to satisfy his, her or its tax liability.

You may be subject to state, local and other taxes, including with respect to your own particular circumstances.

In addition to U.S. federal income taxes, each shareholder may incur income tax liabilities under the state or local income tax laws of certain jurisdictions in which MDB will operate, as well as in the jurisdiction of that shareholder’s residence or domicile. State and local income tax laws vary from one location to another, and federal, state and local income tax laws are both complex and subject to change. The income tax aspects of an investment in MDB are complicated, and each shareholder should review them with his, her or its own professional advisors familiar with the shareholder’s own income tax situation and with the income tax laws and regulations applicable to the shareholder.

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Allocations of income and loss may be re-determined by the IRS.

A shareholder’s distributive share of MDB income, gains, losses, deductions and credits for U.S. federal income tax purposes is generally determined as set forth in the limited liability company agreement governing our company, which we refer to as the operating agreement, unless such items are allocated in a manner that has no “substantial economic effect.” If it is determined that the allocations in the operating agreement do not possess substantial economic effect, then the IRS might seek to allocate MDB related items in a different manner.

MDB may provide delayed final Schedules K-1.

MDB may not be able to provide final Schedules K-1 to shareholders for any given fiscal year until after April 15 of the following year. The board of directors will endeavor to provide shareholders with final Schedules K-1 or with estimates of the taxable income or loss allocated to their shares on or before April 15, but final Schedules K-1 may not be available until MDB has received tax–reporting information necessary to prepare final Schedules K-1. Shareholders may be required to obtain extensions of time to file their U.S. federal, state, and local income tax returns (which do not provide taxpayers with an extension of time to pay any tax that may be due on such tax returns). Each prospective shareholder should consult with its own advisor as to the advisability and tax consequences of an investment in MDB.

If we are treated as a corporation for U.S. federal income tax purposes, the value of the shares could be materially adversely affected.

The value of the class A common shares of MDB that you hold will depend in part on MDB being treated as a partnership for U.S. federal income tax purposes. We intend to manage our affairs so that, upon becoming a “publicly traded partnership” within the meaning of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Code”), we will not be taxable as a corporation because 90% or more of our gross income in each taxable year will be “qualifying income” (see “Certain Material U.S. Federal Tax Considerations—Classification as a Partnership” for a discussion of the rules relating to qualifying income and publicly-traded partnerships). However, there is no assurance or guarantee that we will meet on an ongoing basis the applicable requirements to be taxable as a partnership and, as discussed below, current law may change so as to cause, in either event, MDB to be treated as a corporation for U.S. federal income tax purposes. If we were treated as a corporation for U.S. federal income tax purposes, then, among other things, (i) we would become subject to corporate income tax and (ii) distributions to our shareholders would be taxable as dividends for U.S. federal income tax purposes to the extent of our earnings and profits. In addition, because a tax would be imposed upon MDB as a corporation, its cash available for distribution would be substantially reduced. We have not requested, and do not plan to request, a ruling from the IRS on this or any other tax matter affecting us.

Our structure involves complex provisions of U.S. federal and state income tax law for which no clear precedent or authority may be available. Our structure is also subject to potential legislative, judicial or administrative change and differing interpretations, possibly on a retroactive basis.

The U.S. federal income tax treatment of holders of our common shares, including the class A common shares representing limited liability interests, depends in some instances on determinations of fact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. You should be aware that the U.S. federal and state income tax rules are constantly under review by persons involved in the legislative process, the IRS and the U.S. Treasury Department, and state governments frequently resulting in revised interpretations of established concepts, statutory changes, revisions to regulations and other modifications and interpretations. The IRS pays close attention to the proper application of tax laws to partnerships and entities taxed as partnerships. The present U.S. federal income tax treatment of an investment in our shares may be modified by administrative, legislative or judicial interpretation at any time, and any such action may affect investments and commitments previously made.

Complying with certain tax-related requirements may cause us to forego otherwise attractive business or investment opportunities or enter into acquisitions, borrowings, financings or arrangements we may not have otherwise entered into.

In order for us to be treated as a partnership for U.S. federal income tax purposes, and not as a publicly traded partnership taxable as a corporation, we expect that at least 90% of our gross income in each taxable year will need to be “qualifying income” on a continuing basis and we must not be, if we were a corporation, required to register as an investment company under the Investment Company Act. In order to obtain such treatment, we (or our subsidiaries) may decide to forego attractive business or investment opportunities. This may cause us to incur additional tax liabilities and/or adversely affect our ability to operate solely to maximize our cash flow.

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Shareholders may be subject to restrictions on deductibility of expenses and other losses.

The ability of the shareholders to utilize any tax losses generated by an investment in MDB may be subject to a number of limitations under the Code, including the basis limitations, the passive activity loss limitations, the “at-risk” limitations, and the excess business loss limitations. See “Certain Material U.S. Federal Tax Considerations” for more information regarding such limitations.

Future legislative or regulatory action could significantly change the tax aspects of an investment in our shares.

The discussion of tax aspects contained in this prospectus is based on law currently in effect and certain proposed Treasury Regulations. Nonetheless, shareholders should be aware that new administrative, legislative or judicial action could significantly change the tax aspects of an investment in our shares. Any such change may be retroactive with respect to transactions entered into or contemplated before the effective date of such change and could have a material adverse effect on the tax consequences of your investment in MDB.

Risks Relating to Our General Business Operations

Although our partner company model has been successful in the past, there is no assurance that we will continue to be successful in selecting our partner companies or that these partner companies will generate income returns at the same or similar levels as those of our prior partner companies.

There is no assurance that MDB will continue to be as successful as when our broker-dealer business was operating as a single, stand-alone business. As a reorganized holding company, we have a limited operating history. We believe that because of the reorganization of our Company, we are subject to some or all of the risks inherent in the establishment of a new enterprise. Some of the risks may arise from the absence of a significant consolidated operating history, the addition of management responsibilities as a public company, including the production of K-1 tax documents for owners of the Company’s shares, and lack of experience in complying with reporting and other obligations associated with being a publicly-traded company listed on Nasdaq. If our business plan, operating as a holding company, turns out to be unsuccessful, investors may lose some or all of their investment in MDB.

Investors in this offering are cautioned that the past successes of the management as executed via their privately held broker-dealer business are no assurance that the newly re-reorganized company will continue to have the same successes or result in same value creation. Investors may lose part or all of their investment in MDB.

We might require additional capital to support operations and business growth and to fund our partner companies; this capital might not be available when needed.

We have funded MDB operations since inception in 2022 primarily through equity financings and revenue generated by the services provided through Public Ventures. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments in our business, particularly in our partner companies, to respond to business opportunities and challenges, including developing new products and services, enhancing our operating infrastructure, expanding our operations, and acquiring complementary businesses and technologies. All of the foregoing may require us to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If we incur additional debt, or issue preferred equity securities, the holders of these debt or preferred security holders would have rights senior to holders of our equity to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to make distributions on our equity. Because our decision to raise capital in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, dilutive effect or nature of any future issuances of securities. As a result, our equity holders bear the risk that future issuances of debt or equity securities could reduce the value of our class A common shares and dilute their interests. Our inability to obtain adequate financing or financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business opportunities and challenges.

Our business depends upon our ability to make good decisions regarding the deployment of capital into new or existing partner companies and, ultimately, the performance of our partner companies, both of which are uncertain.

If we make poor decisions regarding the deployment of capital into new or existing partner companies, our business model will not succeed. Our success as a holding company ultimately depends on our ability to choose the right partner companies, develop these companies, such that these partner companies are operationally successful. If one or more of our partner companies does not succeed, the value of our assets could be significantly reduced resulting in substantial impairments or write-offs, which could cause the results of our operations and the price of our class A common shares to decline.

The risks relating to our partner companies include:

● most of our partner companies have a history of operating losses and a limited operating history;

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● the new technologies that our partner companies attempt to develop and launch commercially may never be developed or may never adequately developed to be commercial or even if commercially developed, may not be accepted in the marketplace;

● the new technologies that our partner companies develop may not be accepted quickly enough or broadly enough resulting in additional need funding to sustain the partner company or the decision to abandon the business at a loss;

● intensifying competition affecting the products and services that our partner companies offer could adversely affect their businesses, financial condition, results of operations and prospects for growth;

● technologies of our partner companies that are subject to regulatory examination, testing and approval, may not be approved by any required regulatory authorities;

● inability to adapt to the rapidly changing marketplaces;

● inability to manage growth;

● the need for additional capital to fund partner company operations, which we may not be able to fund or which may not be available from third parties on acceptable terms, if at all;

● inability to protect partner company intellectual property rights and/or the costs and limitations that partner companies infringe on the intellectual property rights of others;

● inability to put into place, monitor and maintain appropriate compliance programs related to employees, safety or other regulatory requirements which could result in legal liability, bad press and significant additional costs to investigate, address and remediate such issues;

● certain of our partner companies could face legal liabilities from claims made against them based upon their operations, products or work;

● the impact of economic downturns on their operations, results and growth prospects;

● inability to attract and retain qualified personnel; and

● government regulations and legal uncertainties may place financial burdens on the businesses of our partner companies.

Our business model does not rely upon the receipt of operating cash flows from our partner companies.

Our public venture business model does not rely upon the receipt of operating cash flows from our partner companies. We anticipate that our partner companies, while we own them, and they are developing their businesses, will not generate revenues or positive cash flow. To the extent that our partner companies generate any cash from operations, they will retain the funds to develop their own businesses. Our overall day to day operations will rely on cash on hand, dividends from the operation of Public Ventures and PatentVest, and our ability to generate capital from capital raising activities to finance our overall operations and fund the partner companies. If we need capital to fund current and new partner companies, we will seek to raise additional capital. If we are unable to find ways of monetizing our holdings or to raise additional capital on attractive terms, we may face liquidity issues that will require us to curtail our new business efforts, constrain our ability to execute our business strategy, and limit our ability to provide financial support to our existing partner companies. We may also finance our partner companies through their securities offerings or selling, licensing, or joint venturing their businesses. There is no assurance that we will be able to raise any such funding or funding in sufficient amounts to support the early stages of development of our partner companies.

Our success depends, in part, on the successful development of our partner companies.

At this time, we cannot identify the various specific risks that our partner companies will face other than the challenges typically faced by early-stage companies, as well as risks related to general regulatory issues, general technology and product development issues, meeting capital requirements, and market approach and penetration issues that all such early stage and development companies will face in their evolution. To the extent that any of our partner companies fail during the development phase or experience delay until they reach a point where they are able to successfully market their technologies or products in a financially sustainable way, our investment in those partner companies and your investment in MDB will be impaired and you may sustain a loss in your investment and return on investment.

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To be successful, we will need to grow the overall size of MDB and, more particularly, the number and businesses of partner companies. Our success will depend on finding and nurturing early-stage companies and transforming them into successful companies through our managerial and funding resources, including sources of external funding. Expanding the number of partner companies will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain, motivate and integrate additional employees at the MDB (parent) level and at the partner company level. In addition, our management may have to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities at our partner companies. Our future financial and business performance and our ability to compete effectively will depend, in part, on our ability to effectively manage our future growth.

Our partner companies will be early-stage development companies, which will make it difficult to judge and evaluate their businesses and their future success.

The partner companies are and will continue to be early-stage companies, none of which, it is anticipated, initially will have any finalized products or well-defined development, intellectual property, marketing or distribution plans. Because of these factors and the absence of an operating history, it will be difficult for potential investors to fully evaluate the planned technologies and prospective operations and future potential of our partner companies. As early-stage companies, they will be subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays associated with new businesses. Investors should evaluate an investment in us in light of all of the risks inherent and uncertainties encountered by early-stage companies operating in competitive environments. There can be no assurance that our efforts to finance and nurture our partner companies will be successful or that any of our partner companies will ultimately develop their products to a point where the companies reach profitability.

MDB and our partner companies may not have developed sufficient infrastructure to accurately and timely report their financial results and may otherwise have material weaknesses over internal systems of control leading to delay, errors and restatement of financial reports.

Prior to this offering, MDB has been a private company with limited accounting personnel and other resources with which to address our internal control over financial reporting. The partner companies are similarly private companies, also with limited accounting personnel and other resources that are available to conduct their audit functions, which may impact the internal controls over financial reporting of the holding company, MDB. We are not yet subject to the certification or attestation requirements of the Sarbanes-Oxley Act in connection with the preparation of our consolidated financial statements included elsewhere in this prospectus. We evaluated our internal controls over financial reporting, at the levels of our partner companies, subsidiaries and the holding company, and identified three material weaknesses. We did not maintain appropriately designed entity-level controls across each of the five components of internal control as defined by the Committee of Sponsoring Organizations (COSO) 2013 Framework to prevent or detect material misstatements to the consolidated financial statements. In addition, our general information technology controls were not designed, implemented and operating effectively relating to logical access, user terminations, authentication, user access provisioning/modifications and user access reviews supporting substantially all of the Company’s business processes. These deficiencies also resulted in segregation of duties conflicts within certain business processes. Formal accounting policies, procedures and controls were not designed and implemented across substantially all of the Company’s business and financial reporting processes to achieve timely, complete, accurate financial accounting, reporting and disclosures. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

We cannot provide assurance that material weaknesses or control deficiencies will not occur in the future. There were material weaknesses reported in prior years for our partner companies. We have identified material weakness in our internal control over financial reporting and that we are in process of remediating them. There is a possibility that we will be unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our shares could be negatively affected. Additionally, allegations of fraud may have a direct and adverse effect on the value of our brand and shares, which may further negatively impact our financial situation.

One of our subsidiaries, Public Ventures, is subject to Securities and Exchange Commission and FINRA regulation, and, if not compliant with those regulations, may be subject to fines, limitations on activity and financial impairment.

One of our subsidiaries is a broker-dealer, subject to a wide range of regulations under the oversight of the Securities and Exchange Commission, FINRA and state securities regulators, and other financially-oriented governmental authorities. Public Ventures is currently subject to regulations related to its status as a broker-dealer and, if we are able to establish our securities clearing operations, the Company will also be subject to all the regulatory requirements of the Securities and Exchange Commission applicable our securities clearing operations. As is common in the securities industry, we are subject to regular reviews of and investigations into our operations, some of which progress to regulatory actions that may result in fines, censures, and limitations on activity. Currently, we are the subject of two reviews of past broker-dealer activities, which may be either resolved or escalated. We do not know at this time whether these reviews will be escalated to regulatory action, and if they are, what the regulatory assertions would be and what the resolution of such assertions might. Any adverse result, may impair the value of the overall company and a loss of investment value in MDB.

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Our partner companies are likely to be operating in businesses that are subject to extensive regulation, which if not compliant with those regulations may be subject to fines, limitations on activity and financial impairment.

Our partner companies will likely be subject to a large range of regulations, especially if they are engaged in development of medical or pharmaceutical therapies, medical devices and technologies subject to export and import controls. The failure to adhere to any applicable laws or regulations relating to their business conduct may result in investigations, fines, limitations on activities and recalls. The partner company subject to these kinds of sanctions, and possibly MDB, also could suffer from development, marketing, financial and reputational damage. There may be consequential impairment of the value of the overall company and a loss of investment value in the Company.

We plan to operate as a company not regulated under the Investment Company Act of 1940.We may have to buy, sell or retain assets when we would otherwise not wish to do so in order to avoid registration under the Investment Company Act.

We believe our operations are not subject to the Investment Company Act of 1940 (the “Investment Company Act”). We do not hold ourselves out as conducting the business of investing, reinvesting or trading in securities. Rather, we found, own and operate our partner companies to help them develop their businesses. We will have control of our partner companies through a majority ownership position, by being actively engaged on the board of directors and by being involved in the certain management decision processes of the partner companies. We are actively engaged in the development of these companies including creation of the business strategy and path to value creation.

The Investment Company Act regulates companies that are engaged in the business of investing, reinvesting, owning, holding or trading in securities. Under the Investment Company Act, a company may be deemed to be an investment company if it owns investment securities with a value exceeding 40% of the value of its total assets (excluding government securities and cash items) on an unconsolidated basis, unless an exemption or safe harbor applies. We refer to this test as the “40% Test.” Securities issued by companies other than majority-owned partner companies are generally considered “investment securities” for the purpose of the Investment Company Act, unless other circumstances exist, such as the holding company management being actively involved in the management of the underlying company. Additionally, there may be other exemptions that we might be eligible to use to avoid regulation under the Investment Company Act. As a company that builds value by cofounding early-stage technology and life sciences companies, we believe we are not engaged in the business of investing, reinvesting or trading in securities. Consequently, we do not believe that we are not now and will not be an investment company under the Investment Company Act.

We will monitor our compliance with the 40% Test and conduct our business activities to comply with this test and other exemptions such that we are exempt from the Investment Company Act. It is not feasible for us to be regulated as an investment company because the Investment Company Act rules are inconsistent with our strategy of actively helping our partner companies in their efforts to build value. We may need to take various actions, however, that we would otherwise not pursue in order to remain in compliance with the 40% Test. For example, we may need to retain a majority interest in a partner company that we no longer consider strategic, we may not be able to acquire an interest in a company unless we are able to obtain a majority ownership interest in the company, or we may be limited in the manner or timing in which we sell or distribute our interests in a partner company. Our ownership levels also may be affected if our partner companies are acquired by third parties or if our partner companies issue stock which dilutes our majority ownership. The actions may require us to take actions to avoid application of the Investment Company Act of 1940 so as to maintain compliance with the 40% Test that could adversely affect our ability to create and realize value at our partner companies.

Our ability to retain our senior professionals and recruit additional professionals is critical to the success of our business, and our failure to do so may adversely affect our reputation, business, results of operations and financial condition.

Our people are our most valuable resource. Our ability to source attractive technologies and companies to deploy our capital depends upon the reputation, judgment, and execution skills of our senior professionals, particularly our directors and senior management. Despite our efforts to retain valuable employees, members of our management team may terminate their employment with us on short notice. The loss of the services of any of our executive officers or other key employees could potentially harm our business, operating results, or financial condition. Currently, we do not maintain key man insurance policies with respect to any of our executive officers or employees.

We plan on out-sourcing aspects of our business operations in Nicaragua.

We have engaged an affiliated company, MDB Capital S.A., located in Nicaragua to provide specific services from time to time, on an as out-source, as requested basis. Currently, we believe that the Company, PatentVest and our partner companies will use the service company for various activities. We believe that having services performed on a contract basis in Nicaragua will provide cost benefits for our operations in the United States that will enhance our business operational competitiveness. In order to function effectively and efficiently when engaging companies in Nicaragua, we believe that we will have to help train the persons responsible for our service requests so as to have available when needed knowledgeable staffing for our projects. There can be no assurance that our out-sourcing these contract services in Nicaragua will be at competitive and at cost saving rates or that we will be able to find the services there that are able to carry out the required functions.

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Whether or not we will be able to continue to use out-sourcing companies located in Nicaragua will depend on the extent that the United States imposes restrictions on US persons and entities engaging in commerce with companies that employ Nicaraguan persons or are located in Nicaragua. Currently there are Executive Orders in place that restrict immigration of designated groups of individuals into the United States and restrictive sanctions on certain trade-related activities between United States and Nicaragua. In conjunction with the Executive Orders, other departments of the United States government have imposed complimentary sanctions on activities under their jurisdictions to expand the effect of the Executive Orders. The effect and extent of the sanctions, including Executive Order 13851, dated October 24, 2022, is not yet known, but could potentially prohibit both imports from and exports to Nicaragua. Whether these sanctions will be interpreted to include a prohibition on our current and proposed service arrangements to be provided by companies and persons in Nicaragua is yet unknown. But if the sanctions extend to our out-source service arrangements with Nicaraguan persons and entities, we will face disruption obtaining certain services, and we will have to find replacement service providers or personnel. We may have difficulty in finding qualified, competent replacements for those functions fulfilled by our Nicaraguan contract party. If we have to find those kinds of replacements, we also would expect our costs to increase, thereby losing the advantage of our Nicaraguan resources.

There may be securities market risks resulting from owning the equity securities of our partner companies.

Although we are not engaged in the business of investing, reinvesting, or trading in securities, we will own a controlling position in our partner companies pursuant to our business model. We generally will be active in the management and development of our partner companies, as well as actively monitoring their operations to keep abreast of their business development. In time, we anticipate that we will monetize the value we hold in our partner companies. Our monetization process will contemplate the typical forms of merger and acquisition transactions, such as licensing, private and public offerings, asset or company sales and registered common stock distributions. To the extent that any of our partner companies become publicly traded, their value will become subject to market fluctuations. Any fluctuation in the value of our partner companies’ securities, for whatever reason, may affect the value of MDB as a holding company resulting in a partial or total loss of your investment.

We could experience competition from other potential acquirers when we seek to establish partner companies, which may result in not being able to acquire them or having to pay at a higher valuation, thus increasing our risk of loss and reducing potential future gains.

We believe that we will face competition from other capital providers and acquisition oriented entities as we seek to acquire and develop our partner companies. Some of our competitors have more experience identifying and acquiring companies in various industries and have greater financial and management resources, brand name recognition or industry contacts than we possess. We compete with those firms on a number of factors, including our history and reputation, our ability to partner, encourage and support development of each company, the abilities and experience of our professionals in working with development-stage companies, and our ability to source and perform due diligence on new technologies and companies. In addition, even though we seek to acquire technologies at their very early stages of development, we may still pay higher prices in our acquisitions and partner company creation because of competition from other potential acquirers and higher valuations. This could increase the risk of loss and result in lower gains to the holding company.

We may be limited in our ability to attract and continue to employ personnel engaged by our partner companies.

In order to recruit and retain existing and future personnel for our partner companies, we may need to increase the level of compensation that we pay and have to use equity grants as incentives. As our partner companies are subsidiaries, we may not be able to use the value of the partner company for equity grants and similar compensation arrangements. We may have to deploy other incentives, such as higher salaries, better benefits or equity in MDB. Any of these may adversely affect the value of MDB or increase our consolidated expenses.

We strive to maintain a work environment that reinforces our culture of collaboration, motivation and alignment of interests with investors. The effects of becoming public, including potential changes in our compensation structure, could adversely affect this culture. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations.

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There is significant competition for the time and capital of our community members and they have no obligation to continue to own MDB member interests, participate in the development of the partner companies as envisioned by our business model.

We will rely on our community of sophisticated investors that have experience with our public venture approach for partner company formation, development and funding. There is competition for their time and capital. There is no obligation for an investor that is part of our community to continue to participate in our public venture approach or even to hold securities of MDB. As is common, investors will circulate in and out of our community as their interests change over time. The loss of a prominent or an active community participant may diminish the effectiveness of our community and may lead others to change their participation level within the community.

The COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious disease, may materially and adversely affect our business and operations.

The COVID-19 pandemic has prompted national, regional, and local governments, including those in the markets that the Company operates in, to implement preventative or protective measures to control its spread. As a result, there have been disruptions in business operations around the world. To date, we have not been impacted significantly by the COVID-19 pandemic as our work can be conducted remotely due to being largely office and service-based rather than manufacturing or requiring face to face client service.

While the Company will continue to navigate the financial, operational, and personnel challenges presented by the COVID-19 pandemic, the full impact of COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the potential uncertainty related to (and proliferation of) new strains, and related actions taken by federal, state, local and international government officials, to prevent and manage the spread of COVID-19. All of these efforts are uncertain, out of our control, and cannot be predicted at this time.

Impact of Ukrainian Conflict

Currently, we believe that the conflict between Ukraine and Russia does not have any direct impact on our operations, financial condition or financial reporting. We believe the conflict will have only a general impact on our operations in the same manner as it is having a general impact on all businesses that have their operations in North America as a result of international sanctions and embargo regulations, possible shortages of goods and goods incorporating parts that may be supplied from the Ukraine or Russia, supply chain challenges, and the international and US domestic inflationary results of the conflict and government spending for and funding of our country’s response. We do not believe we will be targeted for cyber-attacks in connection with the conflict, but as a financial institution, we are aware that we may be a general target for cyber-attacks. We have no operations in the countries directly involved in the conflict or are specifically impacted by any of the sanctions and embargoes, as we principally operate in the United States. Other than general securities market trends, we do not have reason to believe that investors will evaluate the company as having special risks or exposures related to the Ukrainian conflict.

The collection, processing, use, storage, sharing and transmission of personal information and other sensitive data are subject to stringent and changing state, federal and international laws, regulations and standards and policies and could give rise to liabilities as a result of our failure or perceived failure to protect such data, comply with privacy and data protection laws and regulations or adhere to the privacy and data protection practices that we articulate to our clients.

In the course of our operations and the processing of transactions, we collect, process, store, disclose, use, share and/or transmit personal information and other sensitive data from current, past and prospective clients as well as our employees in and across multiple jurisdictions. The regulatory framework for privacy issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. There are federal, state and foreign laws and regulations regarding privacy, data security and the collection, processing, use, storage, protection, sharing and/or transmission of personal information and sensitive data. For example, the Gramm-Leach-Bliley Act (“GLBA”) (along with its implementing regulations) restricts certain collection, processing, storage, use and disclosure of personal information, requires notice to individuals of privacy practices and provides individuals with certain rights to prevent the use and disclosure of certain nonpublic or otherwise legally protected information. Additionally, many states continue to enact legislation on matters of privacy, information security, cybersecurity, data breach and data breach notification requirements. For example, as of January 1, 2020, the California Consumer Privacy Act (“CCPA”) grants additional consumer rights with respect to data privacy in California. The CCPA, among other things, entitles California residents to know how their personal information is being collected and shared, to access or request the deletion of their personal information and to opt out of certain sharing of their personal information. The CCPA is subject to further amendments pending certain proposed regulations that are being reviewed and revised by the California Attorney General. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. We cannot predict the impact of the CCPA on our business, operations or financial condition, but it could result in liabilities and/or require us to modify certain processes or procedures, which could result in additional costs.

Additionally, the California Privacy Rights Act (“CPRA”) was passed in November 2020 and it will be effective in most material respects starting on January 1, 2023. The CPRA imposes additional obligations on companies covered by the legislation and will significantly modify the CCPA, including by expanding clients’ rights with respect to certain sensitive personal information. The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. The effects of the CCPA and the CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.

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We expect more states to enact legislation similar to the CCPA and the CPRA, which provide clients with new privacy rights and increase the privacy and security obligations of entities handling certain personal information of such clients. The CCPA has prompted a number of proposals for new federal and state-level privacy legislation, such as in Virginia and Colorado, both with laws to take effect in 2023. It is anticipated that all such laws will add additional complexity, have variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.

Additionally, our broker-dealer, Public Ventures is subject to SEC Regulation S-P, which requires that businesses maintain policies and procedures addressing the protection of client information and records. This includes protecting against any anticipated threats or hazards to the security or integrity of client records and information and against unauthorized access to or use of client records or information. Regulation S-P also requires businesses to provide initial and annual privacy notices to clients describing information sharing policies and informing clients of their rights.

Because the interpretation and application of many privacy and data protection laws are uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our services and platform capabilities. If so, in addition to the possibility of being subjected to fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our platform, which could have an adverse effect on our business. Any violations or perceived violations of these laws, rules and regulations by us, or any third parties with which we do business, may require us to change our business practices or operational structure, including limiting our activities in certain states and/or jurisdictions, addressing investigations or being subjected to legal claims by governmental entities or private actors, sustaining monetary penalties, sustaining reputational damage, expending substantial costs, time and other resources and/or sustaining other harms to our business. Furthermore, our online, external-facing privacy policy and website make certain statements regarding our privacy, information security and data security practices with regard to information collected from our clients or visitors to our website. Failure or perceived failure to adhere to such practices may result in regulatory scrutiny and investigation, complaints by affected clients or visitors to our website, reputational damage and/or other harm to our business. If either we, or the third-party service providers with which we share client data, are unable to address privacy concerns, even if unfounded, or to comply with applicable privacy or data protection laws, regulations and policies, it could result in additional costs and liability to us, damage our reputation, inhibit sales and harm our business, financial condition and results of operations.

Cyberattacks and other security breaches or disruptions suffered by us or third parties upon which we rely could have a materially adverse effect on our business, harm our reputation and expose us to public scrutiny or liability.

In the normal course of business, we collect, process, use and retain sensitive and confidential information regarding our clients and prospective clients, including data provided by and related to clients and their transactions, as well as other data of the counterparties to their payments. We also have arrangements in place with certain third-party service providers that require us to share client information. Although we devote resources and management focus to ensuring the integrity of our systems through information security and business continuity programs, our facilities and systems, and those of third-party service providers, are vulnerable to actual or threatened external or internal security breaches, acts of vandalism, theft, fraud or misconduct on the part of employees, other internal sources or third parties, computer viruses, phishing attacks, internet interruptions, disruptions or losses, misplaced or lost data, ransomware, unauthorized encryption, denial-of-service attacks, social engineering, unauthorized access, spam or other attacks, natural disasters, fires, terrorism, war, telecommunications or electrical interruptions or failures, programming or human errors or malfeasance and other similar malicious or inadvertent disruptions or events. We and our third-party service providers from time to time have experienced and may in the future continue to experience such instances. In some cases, the bad actors facilitated unauthorized financial transactions. We also face security threats from malicious third parties that could obtain unauthorized access to our systems and networks, which threats we anticipate will continue to grow in scope and complexity over time. These events could interrupt our business or operations, result in legal claims or proceedings, result in significant legal and financial exposure, supervisory liability under U.S. federal or state, or non-U.S. laws regarding the privacy and protection of information, including personal information, damage to our reputation and a loss of confidence in the security of our systems, products and services. Although the impact to date from these events has not had a material adverse effect on us, no assurance is given that this will be the case in the future.

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Information security risks in the financial services industry have increased recently, in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and other malicious third parties. In addition to cyberattacks and other security breaches involving the theft of sensitive and confidential information, hackers, terrorists, sophisticated nation-state and nation-state supported actors and other malicious third parties recently have engaged in attacks that are designed to disrupt key business services, such as consumer-facing websites. We and our third-party service providers may not be able to anticipate or implement effective preventive measures against all security breaches of these types, especially because the techniques used to sabotage or to obtain unauthorized access to our or our third-party service providers’ technology, systems, networks and/or physical facilities in which data is stored or through which data is transmitted change frequently and because attacks can originate from a wide variety of sources. We employ detection and response mechanisms designed to contain and mitigate security incidents. Nonetheless, early detection efforts may be thwarted by sophisticated attacks and malware designed to avoid detection. We also may fail to detect the existence of a security breach related to the information of our clients and to prevent or detect service interruption, system failure or data loss. Further, as a significant number of people work from home, these cybersecurity risks may be heightened by an increased attack surface across our business and those of our clients and third-party service providers. We cannot guarantee that our efforts, or the efforts of those upon whom we rely and partner with, will be successful in preventing any such information security incidents.

The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding our clients or our proprietary information, software, methodologies and business secrets could interrupt our business or operations, result in significant legal and financial exposure, supervisory liability, damage to our reputation or a loss of confidence in the security of our systems, products and services, all of which could have a material adverse impact on our business. In addition, there recently have been a number of well-publicized attacks or breaches affecting companies in the financial services industry that have heightened concern by clients, which could also intensify regulatory focus, cause clients to lose trust in the security of the industry in general and result in reduced use of our services and increased costs, all of which could also have a material adverse effect on our business.

Most jurisdictions (including all 50 states) have enacted laws requiring companies to notify individuals, regulatory authorities and/or others of security breaches involving certain types of data. In addition, our agreements with certain partners and service providers may require us to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, may cause our clients, partners and service providers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach. A security breach of any of our vendors that processes personal information of our clients may pose similar risks.

A security breach may also cause us to breach client contracts. Our agreements with certain partners and service providers may require us to use industry-standard or reasonable measures to safeguard personal information. We also may be subject to laws that require us to use industry-standard or reasonable security measures to safeguard personal information. A security breach could lead to claims by our clients or other relevant stakeholders that we have failed to comply with such legal or contractual obligations. As a result, we could be subject to legal action or our clients could end their relationships with us. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages, and in some cases our client agreements may not limit our remediation costs or liability with respect to data breaches.

Litigation resulting from security breaches may adversely affect our business. Unauthorized access to our technology, systems, networks or physical facilities, or those of our third-party service providers, could result in litigation with our clients or other relevant stakeholders. These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business or adversely affect our reputation. We could be required to fundamentally change our business activities and practices or modify our products and/or technology capabilities in response to such litigation, which could have an adverse effect on our business. If a security breach were to occur, and the confidentiality, integrity or availability of personal information was disrupted, we could incur significant liability, or our technology, systems or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.

We may not have adequate insurance coverage with respect to liabilities that result from any cyberattacks or other security breaches or disruptions suffered by us or third parties upon which we rely. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.

While we take precautions to prevent consumer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of our products and services or subject us to scrutiny or penalties.

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Risks Pertaining to Partner Companies in General

Based on our business model, some or all of our partner companies likely will need to raise capital from time to time to fund their operations. We may not be able to fund some or all of these amounts, and the amounts may not be available from third parties on acceptable terms, or at all.

We cannot be certain that our partner companies will be able to obtain initial and additional financing on acceptable terms, or at all, when needed. Because our resources and our ability to raise capital are limited and if we do not have funds in reserve for additional capital infusions, we may not be able to provide our partner companies with sufficient capital resources at times when needed to enable them to reach a cash flow positive position. We also may fail to accurately project the capital needs of our partner companies for purposes of our cash flow planning. If our partner companies need to, but are not able to, raise capital from us or other outside sources, then they may need to cease or scale back operations. If our partner companies raise capital from outside sources, the terms of such financings may significantly reduce or eliminate the value of such partner companies. In all such events, our ownership interest in any such partner company could lose some or all of its value.

If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. In addition, the loss of the services of the founders of our partner companies could adversely impact their business prospects and the value of our ownership of the partner company.

Our ability to properly develop our partner companies and be successful in our business model depends in large part upon our ability to attract and retain at the partner company level and at the MDB level highly qualified managerial, scientific, and technical personnel. We will need to hire additional personnel as we further develop and grow our partner companies. Competition for skilled personnel usually is intense. We may not be able to hire and retain highly qualified personnel on acceptable terms. If we are unable to attract and retain high-quality personnel, especially for our partner companies, the rate and success at which they can develop and commercialize products or succeed at all could be limited.

Some intellectual property of our partner companies will be funded through government programs, thus being subject to federal regulation such as “march-in” rights, certain reporting requirements and a preference for U.S. industry. Compliance with these regulations may limit exclusive rights, subject the companies to expenditure of resources with respect to reporting requirements, and limit the ability to contract with foreign manufacturers.

When research is funded in part by the U.S. government, the resulting intellectual property is subject to certain federal regulations pursuant to the Bayh-Dole Act of 1980, or the Bayh-Dole Act. In particular, the federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit to inventions produced with its financial assistance. The Bayh-Dole Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent or other intellectual property to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the intellectual property owner refuses to do so, the government may grant the license itself. Intellectual property discovered under government-funded programs is also subject to certain reporting requirements, compliance with which may require our partner companies or licensors to expend substantial resources. Such intellectual property is also subject to a preference for U.S. industry, which may limit the ability to contract with foreign product manufacturers for products covered by the intellectual property. Moreover, collaboration with academic institutions to accelerate research or development may be limited or create the march in right. Further, the partner companies may choose to license intellectual property in the future that may be subject to government rights pursuant to the Bayh-Dole Act. If, in the future, a partner company co-owns or licenses in technology that is critical to its business that is developed in whole or in part with federal funds subject to the Bayh-Dole Act, its ability to enforce or otherwise exploit patents covering the technology may be adversely affected.

Some of our partner companies may be unable to protect their proprietary rights and may infringe on the proprietary rights of others.

Our partner companies, during their development, will assert various forms of intellectual property protection. Intellectual property is likely to constitute an important part of our partner companies’ assets and competitive strengths. Federal law, most typically, copyright, patent, trademark and trade secret laws, generally protects intellectual property rights. State law also addresses property rights. Although we expect that our partner companies will take reasonable efforts to protect the rights to their intellectual property, the complexity of United States, individual state and international trade secret, copyright, trademark and patent law, coupled with the limited resources of these partner companies and the demands of quick delivery of products and services to market, create a risk that their efforts will prove inadequate to prevent misappropriation of our partner companies’ technology, third parties may develop similar technology independently, or they will otherwise be unable to adequately protected their trade secrets.

Some of our partner companies also license intellectual property from third parties, and it is possible that they could become subject to infringement actions based upon their use of the intellectual property licensed from those third parties. Our partner companies generally obtain representations as to the origin and ownership of such licensed intellectual property; however, this may not adequately protect them. Any claims against our partner companies’ proprietary rights, with or without merit, could subject our partner companies to costly litigation and the diversion of their technical and management personnel from other business concerns. If our partner companies incur costly litigation and their personnel are not effectively deployed, the expenses and losses incurred by our partner companies will increase.

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Where our partner companies enter into intellectual property license agreements, if they fail to adhere to their obligations thereunder, they may lose the ability to continue the license. Such a loss may be materially adverse to the business and future of a partner company.

Third parties have and may assert infringement or other intellectual property claims against our partner companies based on their patents or other intellectual property claims. Even though we believe our partner companies’ products do not infringe any third-party’s patents, they may have to pay substantial legal fees to defend against such claims as well as damages, possibly including treble damages, if it is ultimately determined that such claims have merit. They may have to obtain a license to sell their products if it is determined that their products infringe another person’s intellectual property. Our partner companies might be prohibited from selling their products before they obtain a license, which, if available at all, may require them to pay substantial royalties. Even if infringement claims against our partner companies are without merit, defending these types of lawsuits takes significant time, may be expensive and may divert management attention from other business concerns.

Our partner companies have limited foreign intellectual property rights and may not be able to protect their intellectual property rights throughout the world.

Currently, our partner companies have limited intellectual property rights outside the United States. Filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive, and intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do federal and state laws in the United States. Consequently, our partner companies may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If our partner companies or any of their licensors are forced to grant a license to third parties with respect to any patents relevant to their business, their competitive position may be impaired, and their business, financial condition, results of operations and prospects may be adversely affected. Also, competitors may use the technologies in jurisdictions where our partner companies have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where there is patent protection but where enforcement is not as strong as that in the United States. These products may compete with the products of our partner companies in jurisdictions where they do not have any issued patents and patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for our partner companies to stop the infringement of patents or marketing of competing products by third parties in violation of proprietary rights generally. Proceedings to enforce patent and other intellectual property rights in foreign jurisdictions could result in substantial costs and divert management efforts and attention from other aspects of business operations, could put the patents at risk of being invalidated or interpreted narrowly and patent applications at risk of not issuing and could provoke third parties to assert claims against our partner companies. The intellectual property holder may not prevail in any lawsuits that are initiated and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, efforts by our partner companies to enforce their intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that they develop or license.

Our partner companies may incur substantial costs as a result of litigation or other proceedings relating to intellectual property, including patents, and they may be unable to protect their rights to their products and technology.

If our partner companies or their licensors choose to go to court to stop a third party from using the inventions claimed in their owned or in-licensed patents, that third party may ask the court to rule that the patents are invalid and/or should not be enforced against that third party. These lawsuits are expensive and would consume time and other resources even if our partner companies were successful in stopping the infringement of these patents. In addition, there is a risk that the court will decide that these patents are not valid and that our partner companies do not have the right to stop others from using the inventions. There is also the risk that, even if the validity of these patents is upheld, the court will refuse to stop the third party on the ground that such third party’s activities do not infringe our owned or in-licensed patents.

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Patent terms may be inadequate to protect a competitive position for an adequate amount of time.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions such as patent term adjustments and/or extensions, may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering a product are obtained, once the patent life has expired, our partner companies may be open to competition from competitive products. Given the amount of time required for the development, testing and regulatory review of new products, patents protecting new products might expire before or shortly after such products are commercialized. As a result, a patent portfolio may not provide sufficient rights to exclude others from commercializing products similar or identical to those of the partner companies.

Our efforts to maintain and protect our intellectual property rights through means in addition to registration may not be sufficient to protect our business.

The patents that our partner companies and we have are important assets. Our partner companies and we also rely on our unpatented proprietary technology, trade secrets, processes and know-how. Generally, protection of intellectual property rights will be through filed patents, registered trademarks and registered copyrights. Other proprietary information will be protected through a combination of trade secret laws and confidentiality, non-disclosure and assignment of invention agreements with employees, contractors, collaborators, vendors, consultants, advisors and third parties. Despite these measures, intellectual property rights could be challenged, invalidated, circumvented or misappropriated. To pursue enforcement of these kinds of agreements could involve significant expense, potentially hinder or limit use of intellectual property rights, or potentially result in the inability to use the intellectual property rights in question. If an alternative cost-effective solution were not available, there may be an adverse effect on our financial position and performance.

Enforcing intellectual property rights against one or more third parties can be expensive and time-consuming, and an adverse result in any proceeding could put the intellectual property rights at risk of being invalidated or narrowed in scope of coverage. Patent and trademark challenges would increase the cost of development, engineering and marketing our products. There may not be adequate resources available to enforce any of the intellectual property rights. In addition, the ability to enforce intellectual property rights depends on the ability to detect infringement, and the ability to obtain evidence of infringement. Where enforcement is sought, a claim may not prevail or the damages, if any, may not be commercially meaningful.

If trademarks and trade names are not adequately protected, then our partner companies may not be able to build name recognition in the markets of interest and their business may be adversely affected.

A trademark or trade name may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. Our partner companies may not be able to protect their rights to their trademarks and trade names or may be forced to stop using their names. At times, competitors may adopt trade names or trademarks similar to those of our partner companies, thereby impeding their ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trade names or trademarks that incorporate variations of our unregistered trade names or trademarks. If the partner companies are unable to establish name recognition based on our trademarks and trade names, they may not be able to compete effectively and our business may be adversely affected.

Collaborations of various sorts, by our partner companies, such as with respect to research, testing, clinical trials, manufacturing and distribution, will be important to their respective businesses. Their inability to enter into collaboration arrangements as needed, or if such collaborations are not successful, may adversely impact their respective businesses.

Our partner companies will likely seek to collaborate with third parties to engage in product research, clinical trials, marketing, manufacturing, and distribution as part of its strategy. If our partner companies fail to enter into or maintain collaboration arrangements, as needed and on reasonable terms, their ability to develop their business could be delayed, or the costs of development and commercialization increased beyond what would be reasonable and ultimately hindered to the point of business cessation. Furthermore, our partner companies may need to obtain the use of intellectual property rights held by third parties in order to develop their products. As a result, the growth of a particular business or product may depend in part on the ability to acquire or in-license these intellectual property rights.

Future collaboration arrangements between partner companies and third parties may pose a number of risks, including, but not limited to, the following:

(i) collaborators have significant discretion in determining the efforts and resources that they will apply;

(ii) collaborators may not perform their obligations as expected;

(iii) collaborators may elect not to continue or renew development or commercialization programs or license arrangements;

(iv) collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with products of our partner companies or products the collaborators have may be viewed as competitive with product of our partner companies causing them to cease to devote resources to the commercialization of our partner company products;

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(v) collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product;

(vi) collaborators may not commit sufficient resources to the marketing and distribution of our partner company product or products;

(vii) disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of products, might lead to additional responsibilities for our partner companies, or might result in litigation or arbitration, any of which would be time- consuming and expensive;

(viii) collaborations may be terminated by the collaborator, and, if terminated, our partner companies may require more capital to pursue further development or commercialization of the applicable product; and

(ix) collaborations may not be negotiated on a timely basis or acceptable terms, if at all, or they may require substantial additional capital so as to be able to pursue and fund a collaboration.

If collaborations do not result in the successful discovery, development and commercialization of product candidates or if one of the collaborators terminates its agreement, our partner companies may not receive any future research funding or milestone or royalty payments under such collaboration. If a collaborator terminates its agreement, the partner company may find it more difficult to attract new collaborators, and the perception of the product or the business and financial condition of our partner company could be adversely affected.

Risks Related to Invizyne

Invizyne has a limited operating history on which to evaluate its ability to achieve its operating objectives.

Invizyne was founded in 2019, has a limited operating history, and only incurred losses to date. Therefore, there can be no assurance that the efforts of Invizyne will produce a commercial product, market acceptance or revenues that will sustain its business. With a limited operating history and no commercialized products at this time, it will be difficult for investors to make predictions about its future success or viability and any predictions may not be as accurate as they could be if it had a longer operating history or a company history of successfully developing, commercializing and generating revenue from products for a mass market.

Invizyne may not be successful in its efforts to use its proprietary synthetic biological platform to build a pipeline of products.

A key element of Invizyne’s strategy is to use its experienced management, engineering and scientific teams to build a pipeline of products using its synthetic biological platform and further develop those pipeline products into commercially viable products faster and cheaper than possible using traditional materials and methods. Although its R&D (research and development) efforts to date have resulted in what it believes to be potential pipeline products, it may not be successful in further developing such products to commercial viability or be able to continue to identify and develop these and other pipeline products. Even if it is successful in continuing to build its product pipeline, not all potential pipeline products it identifies will be suitable for development and use in commercial products. If Invizyne is unsuccessful in these efforts, the value of the company will be lost, our holding company investors may suffer a loss in relation to their investment in the Company, and Invizyne may have to curtail or cease its business.

The market, including clients and potential investors, may be skeptical of the viability and benefits of Invizyne’s pipeline products because they are relatively novel and are based on complex technology.

The viability and benefits of Invizyne’s pipeline of products, which include pharmaceutical cannabinoids, isobutanol (a 2G biofuel), and other natural, novel and/or rare molecules, may be difficult to assess because they are based on a relatively novel and complex technology. Invizyne’s technology consists of pioneering multi-stage enzymatic bioconversion systems named SimplePath. SimplePath systems and the resultant pipeline products are in various stages of the research and development phase, the pilot production phase and/or in pre-clinical assessment as a therapeutic or product for other uses. It is often an issue that what is possible in the small quantities used at the research level cannot be replicated as production quantities are increased for testing and commercialization. Each pipeline product will be required to be progressively scaled up from early research production quantities to show the feasibility of production in larger quantities, whether for clinical evaluation, testing, and ultimately commercial manufacturing amounts before being made available to clients. As Invizyne continues to develop and optimize SimplePath systems to make its pipeline products in the quantities needed for research, clinical or testing evaluation and manufacturing, there can be no assurance that such pipeline products will be understood, approved, or accepted by clients, regulators and potential investors, that the relevant SimplePath systems can be commercially manufactured, or that it will be able to sell pipeline products at competitive prices and with features sufficient to establish demand and generate revenues or any level of profit. Another consideration is if a pipeline product is a candidate as an active pharmaceutical ingredient, then it will require FDA or any other applicable regulatory approvals, including manufacturing approvals, which may not be obtainable. If it is unable to convince potential clients of the utility and value of its pipeline products, it will not be successful in entering the markets that it has identified, and its business and results of operations will be adversely affected.

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The synthetic biology market is a rapidly growing and changing market, and if Invizyne is unable to keep up to date with developments, its business may be adversely affected.

Invizyne has experienced a rapidly growing and changing business space within the synthetic biology market. The intellectual property aspects of this market are evolving, and patents filed several years ago by potential competitors are currently being granted, which may force Invizyne to license technologies it needs for its processes or to develop a workaround to the valid claims of others. Invizyne may not be able to obtain any necessary licenses or develop processes that do not infringe on others; in which case its business will be impaired and it will be prevented from executing its business plan. The cell-free synthetic biology market in which Invizyne seeks to compete, is relatively new, and therefore the extent to which it may encounter intellectual property of others that limits or restricts its processes is unpredictable

Invizyne may face unique regulatory hurdles because its bio-synthesized compounds are novel.

Because bio-synthesized compounds are novel, regulators and the public, may perceive them differently from naturally occurring molecules, notwithstanding the fact that molecules are the same whether synthetically created or naturally occurring. Therefore, Invizyne may have to provide additional validation related to the science of its compounds in order to obtain regulatory and market approval to gain product adoption. Providing additional validation will cause delays, which will result in additional funding requirements than have been anticipated. It may never achieve the required approvals in which case its business model will be impaired. Invizyne may not be able to achieve commercial success.

Because its compounds are novel, Invizyne will have to perform tests for safety, use, and claim validation.

We anticipate, because its compounds are unique, that Invizyne will face all the hurdles of a new technology in the marketplace. Depending on the use of the compounds, Invizyne may have to comply with the extensive array of medically related regulation. In addition, it anticipates having to conduct many forms of tests to convince regulators, commercialization partners and potential users of the safety, uses, and claim validation to be able to commercialize and gain market acceptance for its compounds. If it is unable to successfully justify the efficacy, safety and potential of its compounds, or do so in a timely manner, it will not be able to successfully develop its business and may have to curtail or cease its business. Holders of our class A common shares may lose value in their holdings.

Invizyne is highly dependent on its ability to retain its current scientific and other staff to hire additional employees with specialized backgrounds as needed.

In this early stage of its development, Invizyne is highly dependent on retaining and motivating its current scientific and other staff. We believe that its future success depends on retaining such persons with key knowledge about its platform, potential products and business objectives. Success also depends on being able to expand its employee base as required. We believe there are relatively few persons with specific knowledge of cell-free synthetic biology. Persons with the talents that Invizyne seeks to hire tend to be in high demand and it may not be able to hire such persons as and when needed. The inability to hire and retain necessary employees may have an adverse impact on its business implementation.

The ability to scale up commercial manufacturing may not be possible.

Although we believe Invizyne is having success in creating molecules in its laboratories, there can be no assurance that its compounds can be produced cost-efficiently on a commercial basis or at all. It has no experience in large-scale production, and anticipates having to either develop the scale production expertise or instead to rely on others to undertake commercial manufacturing on its behalf. Because its compounds are novel and complex, there may be no third parties available to manufacture Invizyne’s compounds. Large-scale manufacturing will need a supply of proteins to run its reactions. We believe that there are not many suppliers of the critical components for the development and manufacturing of its compounds. There is no assurance that these components will be available, or if available, will produce the reactions that Invizyne requires. There may be delays in locating suitable suppliers and manufacturer partners, which could delay, limits or make actual production unfeasible.

Risks Related to PatentVest

If PatentVest does not identify the full range of patent opportunities relevant to clients’ intellectual property portfolio, its reputation will be harmed and it may be liable for service failure.

One of the primary services that PatentVest provides its clients is an analysis of their intellectual property portfolio and how the portfolio may be protected and expanded through additional patent and other IP protection opportunities. We believe that its ability to attract and retain clients depends on its ability to identify actual and potential patent assets for clients. Although there is no guarantee that we will be able to identify all potential patent opportunities, if we miss a patent opportunity or fail to provide the services contracted by clients in a workmanlike manner, then the reputation of PatentVest will be harmed, and it may be liable for damages due to providing its services negligently.

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If clients do not agree that the patents opportunities identified in the PatentVest reports are relevant to their businesses, PatentVest will have difficulty retaining and attracting new clients, which could harm its operating results.

The clients of PatentVest use the services to help them analyze their existing and potential intellectual property. If the clients perceive that the analysis and the opportunities are not relevant to their business requirements, then they will not find value in its reports and services. This may harm its reputation and make it difficult to retain a client and attract new clients, with an adverse consequence to operating results.

PatentVest is dependent on relationships with third parties, including public sources, to provide it with data, information and other services; if any of these relationships change, its business could be adversely affected.

The PatentVest reports and services are developed using data, information or services obtained from third-party providers and public sources. The commercial relationships with third-party providers whose capabilities complement those of PatentVest, may also be competitors which might make PatentVest vulnerable to unpredictable price increases and unfavorable licensing terms. If public sources of data that are relied upon were to begin competing with PatentVest directly, or if they were to increase the cost that PatentVest pays to access their data, otherwise prohibit if from collecting and synthesizing the data they provide, or cease existing altogether, PatentVest may not be able to perform its services and operating results could be adversely impacted.

PatentVest might not be able to scale its business as fast as it believes can be done or be able to maintain the quality of its services and reports.

PatentVest has operated, to date, on a small scale, and it has not proven yet its ability to commercialize services on a large scale. In order to do this successfully, it may have to make additional technology and relationship investments that could delay or limit its ability to develop and commercialize its reports. The reports may be found to be ineffective, unreliable or otherwise unsatisfactory to potential clients as there may be unforeseen complications in the processes of scaling. These complications could delay or limit the ability of PatentVest to provide services or reports, could increase the cost of its products, prevent it from implementing processes at the current appropriate quality and scale levels, and thereby cause the business to suffer. Moreover, PatentVest needs to grow sales, marketing and support staff or make appropriate arrangements with strategic partners to market, sell and support its products. If PatentVest is not able to compete effectively with others while scaling commercially on a timely basis, in sufficient quantities or on commercially reasonable terms.

We believe patent analysis is a highly competitive business, and if PatentVest fails to develop widespread brand awareness in a cost-effective manner, the business may suffer.

The services and reports offered by PatentVest compete with many other providers of similar services, such as other companies performing intellectual property analytics, law firms, and patent filing firms. The services provided are subject to technological changes and evolving client demands. We believe that in order for PatentVest to achieve market acceptance and to maintain and grow a client base, it is critical to develop and maintain the quality of its services and reports and to increase the awareness of the brand. If we fail to provide what the client requires, and it fails to promote and maintain its brand successfully, it may fail to attract or retain clients to the extent necessary to realize a sufficient return on its brand-building efforts and to sustain the business.

PatentVest is licensed to offer legal services under Arizona law, and it plans to offer legal services as part of its package of intellectual property service offerings. As a result, PatentVest must comply with the ethical and legal provisions, licensing responsibilities and obligations of a law firm under the laws of the State of Arizona.

PatentVest has obtained a license from the State of Arizona to provide legal services, and it is expected to provide services in order to enhance the overall package of the PatentVest intellectual property related offerings. Being licensed to provide legal services will likely impact the non-legal aspects of PatentVest’s business as it must comply with the regulatory responsibilities and ethical obligations of operating a law firm as dictated by Arizona law and ethical standards. In respect of those services provided to clients that constitute providing legal advice, PatentVest will have to abide by the many obligations that must be observed by attorneys, including (i) complying with confidentiality obligations towards its legal clients, (ii) discharging attorney-client privilege obligations, (iii) adhering to legal compliance, ethical and regulatory standards of Arizona, (iv) avoiding conflicts of interest, (v) handling of client funds, if any, and (vi) acting in the best interests of the client. There may be instances when the legal rights of a client of the PatentVest law group must take precedence over a business interest of PatentVest and may limit its ability to provide advice or business services to others with respect to intellectual property matters, scope of claims and pursuit of patent claims or require PatentVest to cease providing intellectual property advice and strategy to a particular client altogether. The failure to operate the legal business in compliance with the responsibilities and ethical requirements placed by Arizona on law firms will subject the PatentVest law practice to sanctions by regulators and the bar association and may result in malpractice liability for PatentVest. Additionally, the legal regulatory authorities of Arizona may require PatentVest to cease operation of this aspect of our overall business altogether.

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Risks related to Public Ventures

Public Ventures plans on conducting offerings where we will act as a placement agent or an underwriter, and thus we will be subject to underwriter and similar liability.

As part of our business, as it has been conducted over the last 25 or so years, through Public Ventures, we expect to act as an underwriter and sales agent in a number of capacities. We may be a single underwriter or agent of a securities offering or a co-underwriter or agent participating in a securities offering. There are other types of offering where Public Ventures may be characterized as an underwriter. In each of these instances, it will bear a liability dictated by Section 11(a) of the Securities Act of 1933, as amended (“Securities Act”). Under the Securities Act, an underwriter is liable at law or in equity if any part of the registration statement used in the offering of securities, in which we participate as an underwriter, “contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading….” What constitutes an offering document with respect to underwriter liability applies to any manner of offering materials. This liability also extends to private offerings of securities and their documentation, where Public Ventures may act as a placement agent. In determining materiality, a court will not inquire into limitations on the underwriter’s or placement agent’s ability to conduct its due diligence investigation and assessment of the offeror, but will instead assess whether the statements, taken together and in context, would have misled a reasonable investor about the nature of the investment. Section 11(b) of the Securities Act provides two affirmative defenses to Section 11(a) liability: the expert defense and the non-expert defense, which are collectively known as the due diligence defense. Although we conduct due diligence for all our transactions, there is no assurance that the level of due diligence will uncover any failings in the materials used by investors, or that it will uncover deliberate misstatements. Therefore, for any offering of securities, Public Ventures may become liable as an underwriter or selling agent. Such a liability will have a significant impact on our overall business in terms of monetary cost and also on our reputation.

Public Ventures is in the process of developing self-clearing capabilities which will be necessary to operate its business as planned.

Public Ventures is in the process of developing capabilities for self-clearing Untied States equity securities. This process requires members to demonstrate their financial, operational and systems capacities to perform this business and be capable of complying with the regulations that apply to Public Ventures. Public Ventures has recently obtained regulatory approval from certain pertinent regulatory entities and is in the process of obtaining the required memberships and making the contractual arrangements necessary to operate in this business. This additional capability will enhance Public Ventures in the small and micro-cap market.

As a broker-dealer, Public Ventures will have to expend considerable resources on maintaining adequate compliance practices. The failure to be in regulatory compliance will result in fines, sanctions and the possible curtailment of operations.

Both the broker-dealer operations and the self-clearing operations are subject to extensive regulation. In addition, regulators perceive that engaging in business with “small and micro-cap” companies (those with market capitalizations of $300 million and under) and “penny” stocks (stocks with market prices of less than $1.00) is an especially high-risk activity, and therefore, extensively review and supervise such business activities. Public Ventures focuses on this niche as we believe it offers a significant opportunity for clients of Public Ventures and other persons to gain value on their securities holdings, and we believe that such companies need support access to capital. By focusing on this business, however, Public Ventures we will likely increase the potential for regulatory oversight and the potential for regulatory action against the firm. Certain aspects of the regulatory regime, including the Know Your Client (KYC) and Anti Money Laundering (AML) requirements, are particularly difficult to oversee. The ability to oversee KYC and AML requirements is critical to its ability to expand our client networks and increase the volume of transactions the firm performs as required by its business model. If Public Ventures is not able to fulfill its regulatory obligations, it may be fined, have to change its business at greater cost, or be required to cease its business.

In addition to the direct employees of Public Ventures, other persons in our overall corporate structure may be considered subject to FINRA review and subject to the supervision of the broker-dealer. If persons who are employed by parts of our company engage in securities transactions, but are not employed by the broker-dealer and/or are not licensed persons with FINRA, Public Ventures may be in violation of its FINRA license and subject to fines, limitations on the ability to conduct business. Therefore, the Company will need to create a structure that ensures all of the parts of the Company will strictly adhere to FINRA rules so as to avoid any fines, limitations on the ability to conduct business or actual business closure. The loss or curtailment of the business of Public Ventures would result in a significant loss of business opportunity and revenues to the Company, and would result in a significant impairment to our reputation.

We may be exposed to more cybersecurity threats as we expand our business.

With the expansion in the business to include clearing services, the Company will handle increased amounts of sensitive financial and other information about investors and company clients’ holdings, and transactions that can be targeted by cybercriminals. We will need to have in place an adequate internal security infrastructure to protect clients’ information and assets and minimize potential liabilities for the business. In addition, as cybersecurity threats become more and more sophisticated, we will have to continually expend funds to upgrade and expand our security measures, maintain insurance and overall be vigilant to protect our operations and clients.

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The clearing operations of Public Ventures will require contractual arrangements with several key industry entities, which, if not followed, will require it to terminate that portion of its business.

To establish and to operate a clearing business, Public Ventures must enter into contractual arrangements with the Depository Trust Company, National Securities Clearing Corporation and a settlement bank. These are complex sets of arrangements that must be strictly adhered to, otherwise Public Ventures will not be able to use their services. Without these services, Public Ventures will not be able to clear trades for clients. Not only does Public Ventures need these agreements, but as a result of them, it will need to implement systems and interaction platforms with them and other parties in the settlement process. New information technology to be implemented will include a core clearing system, an order management system, and corporate communications system, amongst others. These many activities will happen in parallel and require significant effort to successfully implement them and maintain them thereafter. Failure to complete any of the individual tasks will prevent Public Ventures from launching and conducting its self-clearing business. Part of the implementation risk the firm will face includes the vendor’s capacity to fulfill the service levels promised to Public Ventures. Public Ventures has chosen novel providers with excellent technology but lesser track records. Assuring these suppliers will deliver their promised services is necessary for the successful implementation of the technological platform the business requires to operate. The failure in any of the many aspects described above will delay or prevent our operations from being implemented and performed or possibly require us to terminate our business.

Public Ventures will have to maintain adequate capitalization levels to conduct its broker-dealer and clearing businesses.

To operate the broker-dealer and self-clearing operations, Public Ventures must meet different capitalization requirements in the Company. To do this, it will have to maintain within the capital structure of the Company various cash and cash equivalent assets and retain access to necessary lines of credit that can assure its ability to comply with changing deposit requirements of the SEC and of the Depositary Trust Company, DTC, and the National Securities Clearing Corporation, NSCC. It is expected that these regulations will undergo substantial changes, from time to time, which could require additional capital as settlement operations move to T+1 (one day after the settlement date) and T+0 settlement in the future. Without the required capital at any time, Public Ventures will not be able to operate its business.

Settlement bank services are difficult to arrange, without which Public Ventures will not be able to pursue a clearing business.

There are only a limited number of banks currently offering settlement services to clearing firms. Public Ventures could be unable to continue providing clearing services if it is unable to enter into and then maintain a settlement bank arrangement, or if the selected settlement bank decides to exit this business.

Hiring and organizing personnel for the clearing operations.

To be able to implement and operate the self-clearing activities, Public Ventures will have to hire and retain the human talent capable of handling the operational activities and fulfilling the compliance requirements of the business. Trading and settlement and compliance personnel will be necessary to manage the operations. Further expertise in financial matters and obligations for self-clearing will also be required. Although it is following a conservative approach to launching the business and onboarding clients that will cause less stress on the organization, the firm’s ability to perform going forward nonetheless depends on successfully recruiting, training and retaining new personnel. As part of these recruitment and retention efforts, the firm must ensure that it can develop an adequate supervising and leadership structure capable of supporting the successful development of its business model.

Where permitted by regulation, Public Ventures will use an overseas out-source provider for some of the self-clearing operation activities although political and social instability and the threat of sanctions by countries, including the United States, may disrupt or hinder the delivery of such services and result in increased costs.

We have a contract with a Nicaraguan company to provide, on an out-sourced, as requested basis, certain back-office services that support our broker dealer activities and patent related services and other requirements. We plan to expand and use this service facility, where permitted, for certain aspects of the self-clearing operations that Public Ventures will engage in. We believe that these operations will provide a competitive advantage to the Company and facilitate developing this new business in an efficient and profitable manner, as human resources and technological infrastructure in Nicaragua allows local companies to provide quality service at the level expected by US clients at a fraction of the cost. Any disruption to social and political stability in Nicaragua could affect the contractor’s capacity to achieve its goals. The current political environment in Nicaragua is unsettled due to a political crisis that erupted in 2018, which has yet to be resolved. Continued or escalated political instability and the possibility of sanctions from other countries, including the United States, could disrupt local business and may hinder or disrupt the delivery of services to our United States operations. The United States has several Executive Orders in force which impose sanctions regarding immigration of certain groups of persons and imposing wider sanctions in respect of certain trading activities. We constantly monitor the situation and have a business continuity strategy in place to assure consistent operations and activities in the United States. To the extent we are prohibited from contracting with entities in Nicaragua, our expenses may increase, and there may be disruption in our workforce that will have to be replaced.

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Risks Related to this Being a Public Company and Owning Our Class A Common Shares

Control by management may limit your ability to influence the outcome of director elections and other transactions requiring shareholder approval.

Two persons, Anthony DiGiandomenico and Christopher Marlett, own all the class B common shares. The class A common shares have one vote per share, and the class B common shares have five votes per share. The class A common shares and class B common shares vote together as a single class on all matters, including the election of directors. There are 5,000,000 class B common shares issued and outstanding, currently representing 90.8% of the aggregate voting authority of our common shares immediately prior to the date of this prospectus. Therefore, even if the maximum offered shares are sold, the class B common shares will continue to be able to dictate the outcome of all matters put before the shareholders. There is no automatic or voluntary conversion of the class B common shares into class A common shares, thus the class B common shares will have control of MDB for an indefinite period of time.

Based on the foregoing, the class B common shares will have significant influence over corporate actions requiring shareholder approval, including the following actions:

● to determine the composition and to elect the board of directors;

● to amend or prevent a change in our operating agreement;

● to effect or prevent a merger, sale of assets or other corporate transaction; and

● to control the outcome of any other matter submitted to our shareholders for vote.

The existence of the class B common shares may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of MDB, which in turn could reduce our shares price or prevent our class A common shareholders from realizing a premium over our share price.

Future transfers by holders of class B common shares generally will result in those shares converting to class A common shares, subject to limited exceptions, such as certain transfers effected for estate planning purposes. The conversion of class B common shares to class A common shares will have the effect, over time, of increasing the relative voting power of those holders of class B common shares who retain their shares in the long term. As a result, it is possible that the persons or entities continuing to hold our class B common shares could gain significant voting control as other holders of class B common shares sell or otherwise convert their shares into class A common shares.

If, and when, the class A common shares are listed on Nasdaq, we will be deemed a “controlled company” under the listing rules because our class B common shares are held by two persons who have more than 50% control. As a controlled company, MDB will be exempt from certain of the corporate governance obligations that other companies must follow when listing on Nasdaq.

The class B common shares are held by two persons who have control over the operations of the Company. Therefore, MDB is a controlled company under the Nasdaq listing rules and will be exempt from certain listing requirements, including having (i) a board comprised of a majority of independent directors, (ii) a compensation committee, and (iii) a director nominations committee. Additionally, we will not be required to hold annual meetings. Management intends to take advantage of these exemptions. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. Notwithstanding the exemption, currently we have a board that has several independent directors, we are required to have and will have an audit committee, and related party transactions will have to be reviewed by the audit committee. Shareholder approval will be required for stock options or purchase plans, and the financial statements must be audited by an independent public accountant that is registered with the PCAOB.

We will remain a controlled company until we have issued at least 25,000,001 class A common shares and none of the outstanding class B common shares are converted into class A common shares on a one-for-one basis. At that point, the class B common shares will no longer hold a majority of the voting control, and we will no longer be considered a controlled company. The required number of outstanding class A shares to end our controlled company status will decrease proportionally as we reduce the number of outstanding class B common shares

The dual class structure of our currently issued equity securities may adversely affect the trading market for our class A common shares.

Certain stock index providers, such as S&P Dow Jones, exclude companies with multiple classes of shares of equity from being added to certain stock indices, including the S&P 500. In addition, several stockholder advisory firms and large institutional investors oppose the use of multiple class structures. As a result, the dual class structure of our currently issued equity may prevent the inclusion of our class A common shares in such indices, may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure, and may result in large institutional investors not purchasing shares of our class A common shares. Any exclusion from stock indices could result in a less active trading market for our class A common shares. Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our class A common shares.

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The existence of our registered broker-dealer subsidiary may delay or prevent takeover attempts of our Company.

A third party attempting to acquire us or a substantial position in our equity securities may be delayed or ultimately prevented from doing so by change in ownership or control regulations to which our regulated broker-dealer subsidiary is subject. FINRA Rule 1017 generally provides that FINRA approval must be obtained in connection with any transaction resulting in a single person or entity owning, directly or indirectly, 25% or more of a member firm’s equity and would include a change of control of a parent company.

Our capital structure may have anti-takeover effect.

The existence of our preferred shares that may be issued at the discretion of the board of directors with the terms it determines may have an anti-takeover effect. The board of directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the preferred shares of each series. The board of directors, without shareholder approval, will be able to issue preferred shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the common shares and could also have anti-takeover effects. The ability of our board of directors to issue preferred shares without shareholder approval could have the effect of delaying, deferring or preventing a change of control of the Company or the removal of existing management. We currently have no preferred shares issued and outstanding as the date hereof. Although we do not currently intend to issue any preferred shares, we cannot assure you that we will not do so in the future.

The fact that the class B common shares have a right to five votes per class B common share on all matters presented for a vote to the shareholders, including in the vote for directors, and the fact that the class B common shares currently have a majority ownership position of all the common shares, means that they have an anti-takeover effect, because it would be difficult for an insurgent to overcome the authority that the class B common shares has in the governance of the Company.

The provisions for shareholder business proposals and director nominations in the operating agreement, both described herein, also could have an anti-takeover effect.

The issuance of securities with voting authority greater than the class A common shares will have a voting and control dilutive effect on outstanding class A common shares.

If the board of directors issues any of the preferred shares or obtains shareholder approval for a new class of common shares with voting rights in excess of the one vote per one class A common share, the holders of class A common shares will suffer a voting dilutive effect, in addition to any other economic dilution resulting from the issuance of those securities.

We may make distributions of the securities of our partner companies, including cash and rights to purchase equity of a partner companies

An aspect of our business plan will be distributing to our shareholders assets of the parent company, which may include the securities of our partner companies after they go public, rights to purchase the equity of these companies, and/or cash and other property, from time to time. The distribution of a right to purchase the equity of a partner company may come at a time when a recipient does not have the ability to exercise the right, and thereby lose the opportunity that the right affords. Any distribution of securities of a partner company, cash and other property may have an adverse impact on the value of your class A common shares. On the other hand, we do not plan to regularly make any periodic distributions, therefore investors should not look to any distribution that we might make to be a regular income item in an investor’s portfolio.

We will incur increased costs as a result of operating as a public company, and our board of directors will be required to devote substantial time to oversight of new compliance requirements and corporate governance practices.

As a public company listed in the U.S., we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations impose various requirements on listed public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our board of directors, management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified members of our board of directors.

However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we will be required to furnish a report by our board of directors on our internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal controls over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe, that our internal controls over financial reporting are effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements. We cannot predict if investors will find our class A common shares less attractive because we may rely on these exemptions. If some investors find our class A common shares less attractive as a result, there may be a less active trading market for our class A common shares, and our share price may be lower or more volatile.

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We are a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or

● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.

As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our securities less attractive to potential investors, which could make it more difficult for our security holders to sell their securities.

In addition to our “controlled” company status, we are also a “smaller reporting company” Therefore we may at some time in the future choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.

Under Nasdaq rules, a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, is not subject to certain corporate governance requirements otherwise applicable to companies listed on Nasdaq. If, in the future, we are no longer a “controlled company” and we elect to utilize any of the “smaller reporting company” exemptions, our company may be subject to greater risks of poor corporate governance, poorer management decision-making processes, and reduced results of operations from problems in our corporate organization. Consequently, if we were to avail ourselves of these exemptions, our share price might suffer, and there is no assurance that we would be able to continue to meet all continuing listing requirements of Nasdaq from which we would not be exempt, including minimum share price requirements.

We currently have limited accounting personnel with the background in public company accounting and reporting. We will have to add personnel and devote personnel and financial resources to meet our reporting obligations as a publicly listed company.

We have been a private company with limited operating scale and with the appropriate accounting personnel to adequately execute our accounting processes and other supervisory resources with which to address our internal control over financial reporting. We have hired additional personnel, and we are in the process of hiring more personnel and putting in place protocols necessary to implement appropriate accounting policies, processes and controls to comply with the required expansion in scale of operations and with Section 404. These activities include identifying and recruiting additional individuals with requisite expertise to assist in implementation activities designed to strengthen our internal control over financial reporting to avoid control deficiencies and initiating the design and implementation of improvements to our financial control environment to address our future needs. However, we cannot assure you that the measures we have taken to date, and actions we plan to take in the future, will be sufficient to prevent or avoid potential future material weaknesses in our controls.

Material weaknesses in internal control over financial reporting have been identified by management for the years ended December 31, 2022 and 2021 for MDB and their partner companies, and there can be no assurances that we will be able to remedy these material weaknesses.

Management of MDB, including Invizyne and Public Ventures, with the participation of our principal executive, financial and accounting officer, has identified material weaknesses in the MDB internal control over financial reporting related to the ability to record transactions in the accounting records and preparation of financial statements that are in compliance with accounting principles generally accepted in the United States of America (“US GAAP”). We did not maintain appropriately designed entity-level controls across each of the five components of internal control as defined by the Committee of Sponsoring Organizations (COSO) 2013 Framework to prevent or detect material misstatements to the consolidated financial statements. In addition, our general information technology controls were not designed, implemented and operating effectively relating to logical access, user terminations, authentication, user access provisioning/modifications and user access reviews supporting substantially all of the Company’s business processes. These deficiencies also resulted in segregation of duties conflicts within certain business processes. Formal accounting policies, procedures and controls were not designed and implemented across substantially all of the Company’s business and financial reporting processes to achieve timely, complete, accurate financial accounting, reporting and disclosures. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statement will not be prevented or detected on a timely basis. Although management is in the process of implementing remediation measures into place in response to the identified material weakness and continue to strengthen and oversee our financial close and reporting processes.

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Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” which will be for up to five years after this offering.

Although our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404, we will need to provide effective internal controls over financial reporting, safeguarding of assets, as well as other internal controls. If we are unsuccessful in building an appropriate accounting infrastructure, we may not be able to prepare and disclose, in a timely manner, our financial statements and other required disclosures, or comply with existing or new reporting requirements. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from Nasdaq or other adverse consequences that would materially harm our business. If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed and investors could lose confidence in our reported financial information. Any of the foregoing occurrences, should they come to pass, could negatively impact the public perception of our company, which could have a negative impact on the trading price of our class A common shares.

We do not have key-man insurance.

We do not now have or plan on having key-man insurance on our principal officers. We are dependent on the services of these persons. If we lose their services, and do not have sufficient funds that are typically provided by insurance to hire replacements, our business will be harmed by the lack of leadership talent.

The price of our class A common shares may be volatile, and could, upon listing on the Nasdaq Capital Market, decline significantly and rapidly. Market volatility may affect the value of an investment in our class A common shares and could subject us to litigation.

The trading price of our class A common shares may fluctuate substantially. The price of our class A common shares in the market on any particular day will depend on many factors including, but not limited to, the following:

● price and volume fluctuations in the overall stock market from time to time;

● investor demand for our class A common shares;

● significant volatility in the market price and trading volume of companies operating in the diverse businesses of our core companies and our partner companies;

● variations in our operating results and market conditions specific to our businesses sectors;

● the emergence of new competitors or new technologies of our partner companies;

● operating and market price performance of other companies that investors deem comparable;

● changes or departures of any of our board of directors, senior management or key employees;

● commencement of, or involvement in, litigation;

● changes in governmental regulations;

● actual or anticipated changes in our earnings, and fluctuations in our quarterly operating results; and

● general economic conditions and trends.

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In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of our share price, we may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

In addition, if the market for equity stocks of companies in our industry or industry segments, or the stock market in general, experiences a loss of investor confidence, the market price of our class A common shares could decline for reasons unrelated to our business, financial condition, or results of operations. If any of the foregoing occurs, it could cause the price of our class A common shares to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to our Board of Directors and management.

Certain recent initial public offerings of companies with relatively small public floats have experienced extreme volatility that was seemingly unrelated to the underlying performance of the company. Our class A common shares may potentially experience rapid and substantial price volatility, which may make it difficult for prospective investors to assess the value of our class A common shares.

In addition to the general volatility risks discussed in this Prospectus, our class A common shares may be subject to rapid and substantial price volatility. We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our class A common shares. Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. As a company with a relatively small public float, the class A common shares may experience greater stock price volatility, extreme price run-ups, lower trading volume, large spreads in bid and asked prices, and less liquidity than large-capitalization companies. The aspects of the trading in the class A common shares may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the value of our common stock. Because of the low public float and the absence of any significant trading volume, the reported prices may not reflect the price at which you would be able to sell shares if you want to sell any shares you own or buy shares if you wish to buy share.

If the trading volumes of the class A common shares are low, persons buying or selling in relatively small quantities may easily influence the prices of the class A common shares. A low volume of trades could also cause the price of the class A common shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of the class A common shares. The volatility also could adversely affect the ability of the company to issue additional shares of common stock or other securities and the ability to obtain stock market based financing in the future. No assurance can be given that an active market in our class A common shares will develop or be sustained.

This is a “best efforts, no minimum / 833,333 share maximum offering. The proceeds from this offering may not be enough to properly fund the current financial requirements of the company.

The selling agent has agreed to use its best efforts, on a no minimum / maximum 833,333 share basis, to solicit offers to purchase the shares in this offering. The selling agent has no obligation to buy any of the shares from us or to arrange for the purchase or sale of any specific number or dollar amount of the shares. We may close on any amount of the shares offered hereby. As there is no minimum, there is no assurance that we will raise the funds we seek or that we will have the full amount of funds that we believe we need for our operations as currently planned, as described in the section “Use of Proceeds.” Investors in the early part of the subscription period will be taking a greater risk as they will not know that we will raise sufficient funds from this offering.

Subscriptions by persons are irrevocable during the offering period.

Persons will make their subscriptions during the offering period. Once the subscription agreement for the purchase of the securities offered hereby is submitted to the selling agent and the purchase price is paid to the escrow agent, the subscription is irrevocable. Subscription funds will only be returned to the subscriber if the offering is terminated prior to the closing by the company in its sole discretion. The return of subscription funds, if that occurs, will be without interest or deduction, made by the escrow agent.

The offering prices of the primary offering and resale offering could differ.

The offering price of our class A common shares in the primary offering (the initial public offering) has been determined by negotiations between us and the selling agent based upon several factors, including prevailing market conditions, our historical performance, estimates of our business potential and earnings prospects, and the market valuations of similar companies. The offering price in the primary offering bears no relationship to our assets, earnings or book value, or any other objective standard of value. The estimated offering price in this offering is higher than the $10.00 price at which the selling shareholders acquired their class A common shares. The selling shareholders may sell their shares at prevailing market prices or privately negotiated prices after the close of the primary offering and listing of our class A common shares on the Nasdaq Capital Market. Therefore, the offering prices of our class A common shares in the primary offering and the selling shareholder resale offering could differ. As a result, purchasers in the resale offering could pay more or less than the offering price in the primary offering.

The sale by the selling shareholders may cause the market price of our class A common shares to decline.

The sale of class A common shares by the selling shareholders could increase the share selling volume and sell their shares at a price less than the offering price of this offering, both with the effect of depressing the market price for our class A common shares.

The absence of security analytical reports or the existence of negative security analytical reports may have an adverse effect on the public market price and volume of our class A common shares.

Any trading market for our class A common shares may be influenced by whether or not any analytical research reports are publish about us. We do not currently have and may never obtain research coverage by securities industry analysts. If no securities industry analysts commence coverage of us, the market price and market trading volume of our class A common shares could be negatively affected. In the event we are covered by analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our class A common shares could be negatively affected.

The United States stock markets recently have experienced price and volume fluctuations due to many factors, including inflationary pressures, changing interest rates, the conflict in Ukraine.

The stock market has recently experienced significant price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, with the financial service and technology sectors more volatile than others. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as inflation, the prospect of a recession, and interest rate changes may negatively impact the market price of our class A common shares. These fluctuations may be even more pronounced in the trading market for our class A common shares shortly following the listing of our class A common shares on the Nasdaq Capital Market as a result of the supply and demand forces described above. If the market price of our class A common shares after our listing does not exceed the opening public price, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.

The price of our class A common shares may have little or no relationship to the historical sales price of our capital stock in our first and only private transaction to date.

Prior to the registration and listing of our class A common shares on the Nasdaq Capital Market there has been no public market for our capital stock. We have conducted only one private placement, therefore we do not have any history of sales by which to judge the value of our class A common shares in a public market or to gage demand for the class A common shares in a public market.

33

None of the shareholders of the class A common shares are party to any contractual lock-up agreement or other contractual restrictions on transfer. Their shares are being registered for resale at the same time as the Offering to which this prospectus relates.

Following our listing and commencement of trading on the Nasdaq market, the sales or distribution of substantial amounts of our class A common shares, or the perception that such sales or distributions might occur, could cause the market price of our class A common shares to decline. In addition to the supply and demand and volatility factors discussed above, the sale or distribution of a substantial number of shares of our class A common shares, particularly sales by us or our directors, executive officers, and principal shareholders, or the perception that these sales or distributions might occur in large quantities, could cause the market price of our class A common shares to decline.

USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of our class A common shares in this offering will be approximately $8.7 million, based on the public offering price of $12.00 per class A common share, after deducting underwriting commissions and the estimated offering expenses payable by us.

Our principal purposes for the net proceeds will be to use them for working capital and other general corporate business purposes of our subsidiaries Public Ventures and PatentVest, including the expansion of the self-clearing operations of Public Ventures, initial operating expenses of the law firm of PatentVest, and expanding the marketing of PatentVest. An additional purpose for the net proceeds will be to locate one or more potential technologies on which to found a new partner company. We expect a portion of the net proceeds will be used for due diligence on potential technologies, to negotiate the acquisition thereof, to engage persons to develop the technology, and generally found the partner company. We cannot determine at this time the amount of initial costs that will be associated with the founding of a partner company as we do not have any acquisition project in review at this time. Once a partner company is identified and established, a portion of the net proceeds will be used to initially fund it as seed capital.

The expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. As a result, our management will have broad discretion over how these proceeds are used. Proceeds held by us will be invested in short-term investments, such as bank deposits and United States government securities, until needed for the uses described above.

The following table represents our anticipated use of the approximate net proceeds from this offering at differing net proceed amounts:

Intended Use of Proceeds	$1,200,000 net proceeds (25% of the offering)		$3,700,000 net proceeds (50% of the offering)		$6,200,000 net proceeds (75% of the offering)		If $8,700,000 net proceeds (100% of the offering)
Expansion of Self Clearing Operations of Public Ventures	$	1,000,000	$	3,000,000	$	3,100,000	$	3,100,000
Initial operating expenses of the law firm of PatentVest	$	150,000	$	600,000	$	600,000	$	600,000
Expanding the marketing of PatentVest	$	50,000	$	100,000	$	200,000	$	200,000
Evaluation of Partner Companies and Seed Funding	$	-	$	-	$	1,000,000	$	2,000,000
Working Capital and Other General Purposes	$	-	$	-	$	1,200,000	$	2,800,000

DIVIDEND POLICY

Since our inception as a holding company, except for distributions made in connection with the re-organization of Public Ventures to become a part of the holding company, we have not paid any dividends or made distributions related to our equity securities.

We may make registered and other distributions of the securities of our partner and or subsidiary companies and of cash to our holders of the class A common shares and class B common shares. It is our plan to distribute the securities of our partner companies after they go public, including rights to purchase the equity of these companies, and cash and other property, from time to time. Some of these distributions of securities may be dictated by our operational plan not to be subject to the Investment Company Act of 1940.

Whether any distributions, the kinds of distributions, and the value of distributions are made will depend on many factors and will be determined by the management of MDB, from time to time. Investors should not look to any distribution that we might make to be a regular income item in an investor’s portfolio. Distributions of a right to purchase the equity of a partner company may come at a time when a recipient does not have the ability to exercise the right, and thereby the recipient may lose the opportunity that the right affords. Any distribution of securities of a partner company, cash and other property may have an adverse impact on the value of class A common shares in the market. Distributions of the equity of our partner companies may not result in an overall investor gain on the class A common shares.

34

CAPITALIZATION

The following table sets forth our cash and capitalization as of December 31, 2022 on:

● an actual basis;

● a pro forma as adjusted basis to give effect to the sale of the class A common shares in this offering, in the amount of 833,333 class A common shares for gross proceeds of $9,999,996 pertaining to the offering amount, assuming no commissions are paid to any registered broker-dealer for introducing investors accepted by us.

	Actual December 31, 2022			Proforma Adjusted as of December 31, 2022 for the Offering (1)
Cash	$	4,952,624		$	14,952,620
Equity:
Preferred shares	$	-		$	-
Class A common shares A		-			-
Class B common shares B		-			-
Paid-in-capital		27,764,453			37,764,449
Accumulated Deficit		(5,124,110	)		(5,124,110	)
Total MDB Capital Holdings, LLC		22,640,343			32,640,339
Non-controlling Interest		468,665			468,665
Total equity		23,109,008			33,109,004
Total capitalization	$	23,109,008		$	33,109,004

(1) The number of class A common shares outstanding on a pro forma as adjusted basis in the table above does not include: (i) any class A common shares that may be issued or sold under any employee compensation program, or (ii) any compensation paid in the form of equity to third-party brokers in connection with this offering.

The table above excludes the following shares:

● excludes 5,675,000 class A common shares underlying the assigned restricted share units and other awards under the 2022 Equity Incentive Plan as of December 31, 2022;

● excludes 18,477 class A common shares underlying the warrants issued to the selling agents in connection with the private placement by MDB in June 2022, and excludes up to 66,667 class A common shares that may be subject to the warrants to be issued to the selling agent in connection with this offering; and

● excludes 982,241 class A common shares that may be the subject of future awards under the 2022 Equity Incentive Award Plan as of December 31, 2022.

35

DILUTION

If you invest in our class A common shares in this offering, your interest will be diluted to the extent of the difference between the public offering price per class A common share and the pro forma as adjusted net tangible book value per share of our class A and class B common shares immediately after the closing of this offering. Net tangible book value per share represents our total tangible assets less our total liabilities, divided by the number of outstanding class A and class B common shares. Our net tangible book value of our class A and class B common shares as of December 31, 2022, was $23.1 million, or $3.02 per class A and class B common share.

After giving effect to the receipt of the net proceeds from our sale of 833,333 class A common shares in this offering at the public offering price of $12.00 per class A common share, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 31, 2022, would have been $31.8 million, or $3.75 per class A and class B common share. This represents an immediate increase in pro forma net tangible book value of $0.73 per class A and class B common share to our existing shareholders and an immediate dilution of $8.25 per class A common share to investors purchasing the class A common shares in this offering.

We calculate dilution per class A common share to new investors by subtracting the pro forma net tangible book value per class A common share from the public offering price paid by the new investor. The following table illustrates the dilution to new investors on a per share basis:

	Dilution based on the percentage of the offering raised
	100%		75%		50%		25%
Assumed public offering price per share	$	12.00	$	12.00	$	12.00	$	12.00
Net tangible book value per class A and class B common share as of December 31, 2022	$	3.02	$	3.02	$	3.02	$	3.02
Increase in pro forma net tangible book value per class A and class B common share attributable to this offering	$	0.73	$	0.52	$	0.30	$	0.08
Pro forma as adjusted net tangible book value per class A and class B common share after this offering	$	3.75	$	3.54	$	3.32	$	3.10
Dilution in pro forma net tangible book value per class A common share in this offering	$	8.25	$	8.45	$	8.68	$	8.90

The following table summarizes, on the pro forma as adjusted basis described above as of December 31, 2022, the differences between the existing shareholders and the new investors in this offering with respect to the number of shares, including shares represented by shares purchased from us, the total consideration paid to us and the average price per share based on an assumed public offering price of $12.00 per share before deducting estimated underwriting commissions and estimated offering expenses payable by us.

Dilution based on if 100% of the offering is raised

	Shares Issued					Total Consideration					Average Price Per
	Number		Percent			Amount		Percent			Share
Existing shareholders, including both class A and class B common shares		7,628,966		90.2	%	$	28,815,185		76.8	%	$	3.78
New investors in class A common shares		833,333		9.8	%	$	8,699,996		23.2	%	$	10.44
Total		8,462,299		100	%	$	38,815,181		100	%	$	4.43

Dilution based on if 75% of the offering is raised

	Shares Issued					Total Consideration					Average Price Per
	Number		Percent			Amount		Percent			Share
Existing shareholders, including both class A and class B common shares		7,628,966		92.4	%	$	28,815,185		82.3	%	$	3.78
New investors in class A common shares		624,999		7.6	%	$	6,199,997		17.7	%	$	9.92
Total		8,253,965		100	%	$	35,015,182		100	%	$	4.24

Dilution based on if 50% of the offering is raised

	Shares Issued					Total Consideration					Average Price Per
	Number		Percent			Amount		Percent			Share
Existing shareholders, including both class A and class B common shares		7,628,966		94.8	%	$	28,815,185		88.6	%	$	3.78
New investors in class A common shares		416,666		5.2	%	$	3,699,998		11.4	%	$	8.88
Total		8,045,632		100	%	$	32,515,183		100	%	$	4.04

Dilution based on if 25% of the offering is raised

	Shares Issued					Total Consideration					Average Price Per
	Number		Percent			Amount		Percent			Share
Existing shareholders, including both class A and class B common shares		7,628,966		97.3	%	$	28,815,185		96.0	%	$	3.78
New investors in class A common shares		208,333		2.7	%	$	1,199,999		4.0	%	$	5.76
Total		7,837,299		100	%	$	30,015,184		100	%	$	3.83

The tables above excludes the following shares:

● excludes 5,675,000 class A common shares underlying the assigned restricted share units and other awards under the 2022 Equity Incentive Plan as of December 31, 2022;

● excludes 18,477 class A common shares underlying the warrants issued to the selling agents in connection with the private placement by MDB in June 2022, and excludes up to 66,667 class A common shares that may be subject to the warrants to be issued to the selling agent in connection with this offering; and

● excludes 982,241 class A common shares that may be the subject of future awards under the 2022 Equity Incentive Award Plan as of December 31, 2022.

To the extent that any outstanding options or warrants are exercised, new options, restricted share units or other securities are issued under our stock-based compensation plans, or new class B common shares or preferred shares are issued, or we issue additional class A common shares or warrants in the future, there will be further dilution to investors participating in this offering.

36

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

MDB Capital Holdings, LLC (the “Company” or “MDB”), a Delaware limited liability company, is a holding company that has three wholly-owned subsidiaries: MDB CG Management Company (“MDB Management”); Public Ventures, LLC (“Public Ventures”); and PatentVest, Inc. (“PatentVest”), and has a majority-owned partner company, Invizyne Technologies, Inc. (“Invizyne”).

MDB Management is principally an “administrative” entity whose purpose is to conduct, and wherever possible, to consolidate shared services/resources, for our US-based operations.

Public Ventures is a U.S. registered broker-dealer under the Exchange Act and is a member of FINRA and the Texas State Securities Board. Public Ventures is managed by Christopher A. Marlett and Anthony DiGiandomenico, who are also the founders of MDB. Public Ventures operates on a fully disclosed basis with a nonrelated FINRA member firm, Interactive Brokers, LLC (“Interactive Brokers”), and is not required to maintain a clearing deposit. Interactive Brokers is the clearing firm and custodian of investments maintained by Public Ventures.

PatentVest is a wholly-owned subsidiary that performs intellectual property validation services for Public Ventures’ due diligence functions on the intellectual property of partner and prospective partner companies and creates an intellectual property roadmap for such partner companies.

Invizyne was formed with the objective of taking nature’s building blocks to make molecules of interest, effectively simplifying nature. Invizyne is a biology technology development company that is a majority-owned subsidiary. Invizyne’s technology is a differentiated and unique synthetic biology platform which is designed to enable the scalable exploration of a large number of molecules and properties found in nature.

Prior to January 14, 2022, Public Ventures owned majority interests in PatentVest and Invizyne. On January 14, 2022, Public Ventures distributed 100% of its equity interests in PatentVest and Invizyne to its members in proportion to their respective interests. On January 15, 2022, Public Ventures filed with the Internal Revenue Service to be treated as a corporation for federal income tax purposes. On January 16, 2022, the members of Public Ventures contributed their entire interests in the equity of Public Ventures, Invizyne and PatentVest to MDB, as result of which MDB became the new parent holding company. There was no effective change in the beneficial ownership of Public Ventures as a result of this transaction. On the same day as part of the reorganization, MDB established a management company subsidiary, MDB Management. These reorganization steps are collectively referred to as the “reorganization. In connection with the reorganization, 5,000,000 Class B common shares were issued in exchange for the members’ equity. The Company plans to issue a public offering of Class A shares, no exact date has been established.

The reorganization was completed between entities that were under common control, and the assets contributed and liabilities assumed are recorded based on their historical carrying values. These financial statements retroactively reflect the financial statements of the Company and Public Ventures on a consolidated basis for the periods presented.

On June 8, 2022, MDB completed the first closing of a private placement, consisting of the sale of 2,517,966 shares of Class A common shares at $10.00 per share, for gross proceeds of $25,179,660. On June 15, 2022, the Company completed the second closing of the private placement, consisting of the sale of an additional 11,000 shares of Class A common shares, for gross proceeds of $110,000. Accordingly, the Company received total gross proceeds of $25,289,660 from the sale of 2,528,966 shares of Class A common shares, or $24,746,142 net of $343,518 of offering expenses, which will be used for development of the current partner companies, identifying and developing new partner companies, and general corporate and working capital requirements. In conjunction with the private placement, the Company issued warrants to the placement agent to purchase 18,477 shares of Class A common shares, exercisable upon issuance for a period of 10 years at $13.00 per share, for a cash consideration of $0.001/share. The placement agent’s warrants had a fair value of $106,940, as calculated pursuant to the Black-Scholes option-pricing model and were accounted for as issuance costs that were recorded against paid in capital and paid in capital for the warrants issued.

37

Results of Operations

The Company has determined its reporting units in accordance with ASC (Accounting Standards Codification) 280, Segment Reporting. The Company currently operates in two reportable segments: a broker dealer & intellectual property service and technology development.

The Company’s consolidated statements of operations as discussed herein are presented below.

Consolidated Results of Operations for the Years Ended December 31, 2022 and 2021

	2022			2021			$ Change			% Change
Operating income (loss):
Unrealized gain (loss) on investment securities, net (from our licensed broker dealer) (Notes 1 and 2)	$	15,433		$	(13,020,834	)	$	13,036,267			100.1	%
Realized gain (loss) on investment securities (from our licensed broker dealer)		(7	)		404,169			(404,176	)		(100.0	)%
Gain on distributed investment securities to members’ (from our licensed broker dealer)		-			2,414,093			(2,414,093	)		(100.0	)%
Fee income (from our licensed broker dealer)		1,115,001			-			1,115,001			100.0	%
Other operating income		88,539			368,574			(280,035	)		(76.0	)%
Total operating income (loss), net		1,218,966			(9,833,998	)		11,052,964			112.4	%
Operating costs:
General and administrative costs:
Compensation		2,822,693			1,965,343			857,350			43.6	%
Operating expense, related party		1,107,313			929,587			177,726			19.1	%
Professional fees		1,653,760			1,282,075			371,685			29.0	%
Information technology		348,621			251,147			97,474			38.8	%
Clearing and other charges		16,112			573,320			(557,208	)		(97.2	)%
General and administrative-other		1,024,697			634,907			389,790			61.4	%
Total general and administrative costs		6,973,196			5,636,379			1,336,817			23.7	%
Research and development costs		348,085			454,454			(106,369	)		(23.4	)%
Total operating costs		7,321,281			6,090,833			1,230,448			20.2	%
Net operating loss		(6,102,315	)		(15,924,831	)		9,822,516			61.7	%
Other income:
Forgiveness of Paycheck Protection Program loan, including interest payable		-			251,861			(251,861	)		(100.0	)%
Interest income (from U.S. Treasury Bills)		227,249			-			227,249			100.0	%
Loss before income taxes		(5,875,066	)		(15,672,970	)		9,570,655			61.1	%
Income taxes		-			-			-			0.0	%
Net loss		(5,875,066	)		(15,672,970	)		9,797,904			(62.5	)%
Less net loss attributable to non-controlling interests		(561,013	)		(572,627	)		11,614			(2.0	)%
Net loss attributable to MDB Capital Holdings, LLC	$	(5,314,053	)	$	(15,100,343	)	$	9,786,290			(64.4	)%

38

Operating Income (Loss). For the years ended December 31, 2022 and 2021, respectively, operating losses were derived from the Company’s broker dealer and intellectual property service segment.

The decrease in operating loss for the year ended December 31, 2021 compared to the year ended December 31, 2022 was primarily driven by reduced investment securities activity. The decrease in the realized gain on investments and the unrealized loss in 2021 was offset by an unrealized gain in 2022 which resulted from the sales and distribution of most of the Company’s investment securities in the prior period, which was in preparation for the January 2022 business reorganization. The decrease in other operating income was driven primarily by lower trading volume in 2022 due to market conditions. However, this was offset by an increase in fee income from an investment banking deal completed in the fourth quarter of 2022.

General and Administrative Costs. The increase in compensation expense was driven by the hiring of additional employees in the current period in support of upcoming increased operations. The increase in related party operating expenses was driven by costs related to outsourcing support and were offset by the discontinuation of related party office rent at 2425 Cedar Springs Road in November 2021 of approximately $80,000. The increase in professional fees was driven by legal, tax, audit, and consulting fees related to the corporate reorganization, the private placement financing, and audit fees. The increase in information technology costs was driven by infrastructure expenditures, website development, and other technology expenses in preparation for becoming a self-clearing broker-dealer. The decrease in clearing and other charges was driven by lower trading volume in 2022 due to market conditions. Finally, the decrease in other general and administrative costs was primarily driven by a decrease in outside contractor expense, and a decrease in commission expense related to decreased market activity.

Research and Development Costs. For the years ended December 31, 2022 and 2021, respectively, the research and development costs were derived from the Company’s technology segment.

The increase in research and development costs for the current period was partially offset by increased grant funding. For the year ended December 31, 2022, total research and development costs were $2,312,857, with $1,964,772 reimbursed by grants, resulting in net research and development costs of $348,085. For the year ended December 31, 2021, total research and development costs were $1,995,675, with $1,541,221 of these costs reimbursed by grants, resulting in net research and development costs of $454,454. The increase in research and development costs was driven primarily by an increase in compensation due to the hiring of additional research and development staff, an increase in lab supplies expense, and an increase in grant sub-award expenses issued to a third-party research partner.

Other Income. The decrease in other income was due to the forgiveness of Paycheck Protection Program loan in the prior period versus no such activity in the current period.

Broker Dealer and Intellectual Property Service Segment (Public Ventures and PatentVest) Results of Operations for the Years Ended December 31, 2022 and 2021

	2022			2021			$ Change			% Change
Operating income (loss):
Unrealized loss on investment securities, net (from our licensed broker dealer) (Notes 1 and 2)	$	15,433		$	(13,020,834	)	$	13,036,267			100.1	%
Realized gain on investment securities (from our licensed broker dealer)		(7	)		404,169			(404,176	)		(100.0	)%
Gain on distributed investment securities (from our licensed broker dealer)		-			2,414,093			(2,414,093	)		(100.0	)%
Fee income (from our licensed broker dealer)		1,115,001			-			1,115,001			100.0	%
Other operating income		88,539			368,574			(280,035	)		(76.0	)%
Total operating income (loss), net		1,218,966			(9,833,998	)		11,052,964			112.4	%
Operating costs:
General and administrative costs:
Compensation		1,628,741			1,518,594			110,147			7.3	%
Operating expense, related party		974,396			929,587			44,809			4.8	%
Professional fees		831,532			1,016,318			(184,786	)		(18.2	)%
Information technology		313.789			234,955			78,834			33.6	%
Clearing and other charges		16,112			573,320			(557,208	)		(97,2	)%
General and administrative-other		309,919			525,214			(215,295	)		(41.0	)%
Total General and administrative costs		4,074,489			4,797,988			(723,499	)		(15.1	)%
Research and development costs		-			-			-			-
Total operating costs		4,074,489			4,797,988			(723,499	)		(15.1	)%
Net operating loss		(2,855,523	)		(14,631,986	)		11,776,463			80.5	%
Other income:
Forgiveness of Paycheck Protection Program loan, including interest payable		-			168,122			(168,122	)		(100.0	)%
Interest income (from U.S. Treasury Bills)		38,861			-			38,861			100.0	%
Loss before income taxes		(2,816,662	)		(14,463,864	)		11,647,202			80.5	%
Income taxes		-			-			-			0.0	%
Net loss		(2,816,662	)		(14,463,864	)		11,647,202			80.5	%
Less net loss attributable to non-controlling interests		-			-			-			-
Net loss attributable to controlling interests	$	(2,816,662	)	$	(14,463,864	)	$	11,647,202			80.5	%

39

Operating Income (Loss). The decrease in operating loss for the year ended December 31, 2021 compared to the year ended December 31, 2022 was primarily driven by reduced investment securities activity. The decrease in the realized gain on investments and the unrealized loss in 2021 became an unrealized gain in 2022 which resulted from the sales and distribution of most of the Company’s investment securities in the prior period, which was in preparation for the upcoming January 2022 business reorganization. The decrease in other operating income was driven primarily by lower trading volume in 2022 due to market conditions. However, this was offset by an increase in fee income from an investment banking deal completed in the fourth quarter of 2022.

General and Administrative Costs. The increase in compensation expense was driven by the hiring of additional employees in the current period in support of upcoming increased operations. The increase in related party operating expenses was driven by costs related to outsourcing support and were offset by the discontinuation of related party office rent at 2425 Cedar Springs Road in November 2021. The increase in professional fees was driven by legal, tax, audit, and consulting fees related to the corporate reorganization, the private placement financing, and audit fees. The increase in information technology costs was driven by infrastructure expenditures, website development, and other technology expenses in preparation for becoming a self-clearing broker-dealer. The decrease in clearing and other charges was driven by lower trading volume in 2022 due to market conditions. Finally, the decrease in other general and administrative costs was primarily driven by a decrease in outside contractor expense, and a decrease in commission expense related to decreased market activity.

Other Income. The decrease in other income was due to the forgiveness of Paycheck Protection Program loan in the prior period versus no such activity in the current period.

Technology Segment (Invizyne) Results of Operations for the Years Ended December 31, 2022 and 2021

	2022			2021			$ Change			% Change
Total operating income (loss), net	$	-		$	-		$	-		$	-
Operating costs:
General and administrative costs:
Compensation		408,162			446,749			(38,587	)		(8.6	)%
Professional fees		235,033			265,757			(30,724	)		(11.6	)%
Information technology		18,552			16,192			2,360			14.6	%
General and administrative-other		322,838			109,693			213,145			194.3	%
Total general and administrative costs		984,585			838,391			146,194			17.4	%
Research and development costs		348,085			454,454			(106,369	)		(23.4	)%
Total operating costs		(1,332,670	)		(1,292,845	)		(39,825	)		3.1	%
Net operating loss		(1,332,670	)		(1,292,845	)		(39,825	)		3.1	%
Other income:
Forgiveness of Paycheck Protection Program loan, including interest payable		-			83,739			(83,739	)		(100.0	)%
Interest income		98			-			98			100.0	%
Loss before income taxes		(1,332,572	)		(1,209,106	)		(123,466	)		(10.2	)%
Income taxes		-			-			-
Net loss		(1,332,572	)		(1,209,106	)		(123,466	)		(10.2	)%
Less net loss attributable to non-controlling interests		(561,013	)		(572,627	)		11,614			(2.0	)%
Net loss attributable to controlling interests	$	(771,559	)	$	(636,479	)	$	(135,080	)		(21.2	)%

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General and Administrative Costs. The increase in general and administrative costs-other was driven primarily by increased fees related to patent filings. Compensation, information technology, and professional fees were consistent with the prior period.

Research and Development Costs. The increase in research and development costs for the current period was partially offset by increased grant funding. For the year ended December 31, 2022, total research and development costs were $2,312,857, with $1,964,772 reimbursed by grants, resulting in net research and development costs of $348,085. For the year ended December 31, 2021, total research and development costs were $1,995,675, with $1,541,221 of these costs reimbursed by grants, resulting in net research and development costs of $454,454. The increase in research and development costs was driven primarily by an increase in compensation due to the hiring of additional research and development staff, an increase in lab supplies expense, and an increase in grant sub-award expenses issued to a third-party research partner.

Other Income. The decrease in other income was due to the forgiveness of Paycheck Protection Program loan in the prior period versus no such activity in the current period.

Consolidated Balance Sheet December 31, 2022 and 2021

	December 31, 2022			December 31, 2021		$ Change			% Change
ASSETS
Cash and cash equivalents	$	4,952,624		$	6,225,458	$	(1,272,834	)		(20.4	)%
Grants receivable		809,532			468,353		341,179			72.8	%
Prepaid expenses and other current assets		309,818			150,534		159,284			105.8	%
Investment securities, at amortized cost (U.S. Treasury Bills)		16,188,920			-		16,188,920			100.0	%
Investment securities, at fair value (held by our licensed broker dealer) (Notes 1 and 2)		832,577			55,197		777,380			1,408.4	%
Investment securities, at cost less impairment (held by our licensed broker dealer)		50,000			50,000		-			0.0	%
Investment securities, at cost less impairment		200,000			-		200,000			100.0	%
Deferred offering cost		323,224			-		323,224			100.0	%
Property and equipment, net		624,644			579,142		45,502			7.9	%
Operating lease right-of-use asset, net		1,409,732			720,627		689,105			95.6	%
Total assets	$	25,701,071		$	8,249,311	$	17,451,760			211.6	%
LIABILITIES AND EQUITY
Accounts payable	$	698,782		$	576,492	$	122,290			21.2	%
Accrued expenses		254,745			29,750		224,995			756.3	%
Deferred grant reimbursement		214,998			161,105		53,893			33.5	%
Operating lease liability		1,423,538			720,627		702,911			97.5	%
Total liabilities		2,592,063			1,487,974		1,104,089			74.2	%
Equity:
Members’ equity		-			6,239,168		(6,239,168	)		(100.0	)%
Paid-in-capital		27,764,453			-		27,764,453			100.0	%
Accumulated deficit		(5,124,110	)		-		(5,124,110	)		(100.0	)%
Total MDB Capital Holdings, LLC Members’ equity		22,640,343			6,239,168		16,401,175			262.9	%
Non-controlling interest		468,665			522,169		(53,504	)		(10.2	)%
Total equity		23,109,008			6,761,337		16,347,671			241.8	%
Total liabilities and equity	$	25,701,071		$	8,249,311	$	17,451,760			211.6	%

Financial Condition: The increase in assets was due to changes in several asset classes. The increase in cash and cash equivalents was driven by the funds received from the June 2022 private placement financing, offset by an increase in overall operating expenses during the period and the movement of cash into investment securities, at amortized cost. The increase in grants receivable was driven by increased grant-related research and development activity, as well as the timing of collection of grant funds from the prior period. The increase in investment securities, at amortized cost was driven by moving idle cash into short-term US Treasury bills. The increase in investment securities at cost less impairment was driven by investment in a simple agreement for future equity (“SAFE”) by PatentVest. The increase in property and equipment was driven by the purchases of lab equipment. The increase in the operating lease resulted from the Addison office coming online and increasing the right of use asset during the period.

The increase in liabilities was primarily due to the recording of an operating lease liability for an office property in Addison, Texas. The increase in deferred grant reimbursement was driven by lab equipment purchases.

The equity increase was driven by the private placement in June 2022. The decrease in non-controlling interest was due to the net loss in Invizyne which was partially offset by the ownership change of non-controlling interest.

Liquidity and Capital Resources – December 31, 2022

The Company’s consolidated statements of cash flows as discussed herein are presented below.

	Years Ended December 31,
	2022			2021
Net cash used in operating activities	$	(6,571,820	)	$	(5,832,314	)
Net cash used in investing activities		(16,382,172	)		(423,386	)
Net cash provided by financing activities		21,681,158			-
Net increase (decrease) in cash	$	(1,272,834	)	$	(6,255,700	)

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At December 31, 2022, the Company had working capital of $22,202,730, as compared to working capital of $6,076,988 at December 31, 2021, reflecting an increase in working capital of $16,125,732 for the year ended December 31, 2021. The increase in working capital during the year ended December 31, 2022 was primarily the result of proceeds from the private placement of $25,289,660 and increase in fee income of $1,115,001, offset by the expenditure of $7,286,281 to fund the Company’s operating expenses and a decrease from the prior year of $2,414,093 on gains of distributed investment securities. At December 31, 2022, the Company had cash of $4,952,624 and short-term U.S. Treasury bills of $16,188,920 available to fund its operation.

Operating Activities. For the year ended December 31, 2022, operating activities utilized cash of $6,751,820, which was driven by a combination of increased activity in Invizyne, increased professional and consulting fees related to the business reorganization, subsequent private placement financing, and preparation of the initial public offering.

For the year ended for the year ended December 31, 2021, operating activities utilized cash of $5,832,314, which was driven by a combination of increased activity in Invizyne, increased professional and consulting fees related to the business reorganization and subsequent private placement financing, reduced realized gains on investment securities, and increased unrealized gains on investment securities, net.

Investing Activities. For the year ended December 31, 2022, investing activities consisted of the movement of cash into investment securities, at amortized cost and the purchase of property and equipment in the amount of $16,188,920. This was driven by the purchase of US Treasury Bills and the purchase of laboratory equipment for the expansion of Invizyne.

For the year ended December 31, 2021, investing activities consisted of the purchase of property and equipment in the amount of $423,386. This was driven by the purchase of laboratory equipment and the build out of leasehold improvements for the expansion of Invizyne’s lab facility.

Financing Activities. For the year ended December 31, 2022, financing activities consisted of proceeds of $21,681,158 driven by the receipt of net proceeds from the June 2022 private placement financing. For the year ended December 31, 2021, the Company had no financing activities.

Recently Issued Accounting Pronouncements

See Note 2 in the consolidated financial statements for the discussion on recently accounting pronouncements.

Critical Accounting Estimates

The preparation of financial statements in conformity with general accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have identified certain accounting policies as being critical because they require us to make difficult, subjective, or complex judgments about matters that are uncertain. We believe that the judgment, estimates, and assumptions used in the preparation of our unaudited condensed consolidated financial statements and audited consolidated financial statements are appropriate given the factual circumstances at the time. However, actual results could differ, and the use of other assumptions or estimates could result in material differences in our results of operations or financial condition. Our critical accounting estimates are:

Valuation Allowance for Net Deferred Tax Asset

A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. At December 31, 2022 and 2021, Invizyne, Public Ventures, PatentVest, and MDB CG Management has established a full valuation allowance against all net deferred tax assets.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

A description of the valuation techniques applied to the Company’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows:

Warrants: Warrants to purchase common shares were not actively traded and therefore these securities were valued using the Black-Scholes model. The warrants were categorized in level 2 of the fair value hierarchy. The significant unobservable inputs was volatility of the common shares and it ranged from 77.6% to 95.1%. There was a weighted average rate of 92.3%.

Investment securities, at cost less impairment: Non-public equity securities and SAFE investments are valued based on the initial investment, less impairment. The Company determined that no impairment was warranted due to the fact that no evidence exists that warrants an impairment. Since these securities are not actively traded, we will apply valuation adjustments when they become available, and they are categorized in level 3 of the fair value hierarchy.

Investment securities, at fair value: These securities are valued based on quoted prices from the exchange or other trading platform. To the extent these securities are actively traded, valuation adjustments are not applied, and they are categorized in level 1 of the fair value hierarchy.

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Accounting for Research Grants

Invizyne receives grant reimbursements, which are netted against research and development expenses in the consolidated statement of operations. Grant reimbursements for capitalized assets are recognized over the useful life of the assets, with the unrecognized portion considered a deferred liability and are included in accounts payable and accrued expenses in the consolidated balance sheet.

Grants that operate on a reimbursement basis are recognized on the accrual basis are revenues to extent of disbursements and commitments that are allowable for reimbursement of allowable expenses incurred as of December 31, 2022 and 2021, and expected to be received from funding sources in the subsequent year. Management considers such receivables at December 31, 2022 and 2021, respectively, to be fully collectable, due to the historical experience with the Federal Government of the United States of America. Accordingly, no allowance for grants receivable was recorded in the accompanying consolidated financial statements.

Research grants received from organizations are subject to the contract agreement as to how Invizyne conducts its research activities, and Invizyne is required to comply with the agreement terms relating to those grants. Amounts received under research grants are nonrefundable, regardless of the success of the underlying research project, to the extent that such amounts are expended in accordance with the approved grant project. Invizyne is permitted to draw down (a process of submitting expenses for reimbursement) the research grants after incurring the related expenses. Amounts received under research grants are offset against the related research and development costs in the Company’s consolidated statement of operations.

Stock Based Compensation

The Company and its subsidiaries may periodically issue common shares, stock options and restricted stock units to officers, directors, employees, and consultants for services rendered. Options vest and expire according to terms established at the issuance date of each grant. Stock grants, which are generally time vested, are measured at the grant date fair value and charged to operations ratably over the vesting period.

The Company accounts for stock-based payments to officers, directors, employees, and consultants by measuring the cost of services received in exchange for equity awards utilizing the grant date fair value of the awards, with the cost recognized as compensation expense on the straight-line basis in the Company’s financial statements over the vesting period of the awards.

The fair value of share options granted as stock-based compensation is determined utilizing the Black-Scholes option-pricing model, and is affected by several variables, the most significant of which are the expected life of the stock option, the exercise price of the share option as compared to the fair market value of the common shares on the grant date, and the estimated volatility of the common shares. Unless sufficient historical exercise data is available, the expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The estimated volatility is based on the historical volatility of the Company’s common shares, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair market value of the common shares is determined by reference to the quoted market price of the Company’s common shares on the grant date. The expected dividend yield is based on the Company’s expectation of dividend payouts and is assumed to be zero.

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On February 1, 2021, stock options to purchase 513,750 shares of common stock were granted at an exercise price of $2.53 per share, which was equal to the fair value of the common stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. As of December 31, 2022, stock options to purchase 196,937 shares of common stock have vested, the weighted average exercise price is $2.53, the aggregate intrinsic value is $0.00, and the weighted average remaining contractual term is 5.08 years and 6.08 years for the year ended December 31, 2021. Compensation cost is being recognized on a straight-line basis of $414,965. There has been no change in inputs over the period

The fair value of each option on the date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

Exercise price	$	2.53
Stock price	$	2.53
Risk-free interest rate		0.42	%
Expected volatility		123.04	%
Expected life (in years)		5.0
Expected dividend yield		0	%

Summary of Business Activities and Plans

As stated above, the Company completed the first closing of a private placement, consisting of total gross proceeds of $25,289,660 from the sale of 2,528,966 shares of Class A common shares, which will be used for development of the current partner companies, identifying and developing new partner companies, and general corporate and working capital requirements.

Through this prospectus the Company plans to raise additional capital through its initial public offering. Funds from the offering will be used for development of our current partner company, identifying and developing new partner companies, and general corporate and working capital requirements.

External Risks Associated with the Company’s Business Activities

Covid-19 Virus. The global outbreak of the novel coronavirus (Covid-19) has led to disruptions in general economic activities worldwide, as businesses and governments have taken broad actions to mitigate this public health crisis.

The Covid- 19 pandemic has and may continue to impact the Company’s investments and potential investments, which could disrupt its business activities. The effects of various public health directives and the Company’s work- from-home policies may negatively impact productivity, disrupt the Company’s business activities, and delay timelines and future results, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct business activities in the ordinary course. These disruptions, and perhaps more severe disruptions to the Company’s operations could negatively impact the Company’s business activities and results of operations and financial condition, including the Company’s ability to obtain financing. To date, the Company has not incurred impairment losses in the carrying values of its investments as a result of the pandemic and is not aware of any specific related event or circumstance that would require the Company to revise the estimates reflected in the consolidated financial statements.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “CARES Act”) was enacted in response to market conditions related to the coronavirus (“COVID-19”) pandemic. The CARES Act includes many measures to help companies, including providing loans to qualifying companies, under the Paycheck Protection Program (the “PPP”) offered by the U.S. Small Business Administration (the “SBA”). During 2020, the Company received proceeds from loans in the aggregate amount of $250,960 pursuant to the Paycheck Protection Program (the “PPP Loan”). The proceeds of the PPP Loans were available to be used to pay for payroll costs, rent and other eligible costs. As of December 31, 2021, the Company has used all of the PPP Loan proceeds for eligible costs. The PPP Loans were unsecured and had an interest rate of 1.00% per annum and was subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. In 2021, the PPP Loans totaling $250,960 plus accrued interest of $901 were forgiven in their entirety, are recognized as other income in the Consolidated Statement of operations.

In light of the uncertain and continually evolving situation relating to the spread of Covid-19, this pandemic could pose a risk to the Company. The extent to which the coronavirus may impact the Company’s business activities and capital raising efforts will depend on future developments, which are highly uncertain and cannot be predicted at this time. The Company intends to continue to monitor the situation and may adjust its current business plans as more information and guidance become available.

Inflation Risk. The Company does not believe that inflation has had a material effect on its operations to date, other than its impact on the general economy.

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Supply Chain Issues. The Company does not currently expect that supply chain issues will have a significant impact on its business activities.

Potential Recession. There are various indications that the United States economy may be entering a recessionary period. Although unclear at this time an economic recession would likely impact the general business environment and the capital markets, which could, in turn, affect the Company.

The Company is continuing to monitor these matters and will adjust its current business and financing plans as more information and guidance become available.

Principal Commitments

Net Capital Requirement (Public Ventures)

Public Ventures is subject to the uniform net capital rule (SEC Rule 15c3-1) of the Securities and Exchange Commission (the “SEC”), which requires both the maintenance of minimum net capital and the maintenance of maximum ratio of aggregate indebtedness to net capital. At December 31, 2022 and 2021, Public Ventures had net capital of $3,086,889 and $5,379,323, respectively, which was $2,836,889 and $5,129,323 in excess of the minimum $250,000, as required by the Securities and Exchange Commission Rule 15c3-1.

At December 31, 2022, the Company’s ratio of aggregate indebtedness of $576,929 to net capital was 0.19 to 1, as compared to the maximum of a 15 to 1 allowable ratio of a broker dealer. Minimum net capital is based upon the greater of the statutory minimum net capital of $250,000 or 6 2/3% of aggregate indebtedness, which was calculated as $38,462 at December 31, 2022.

The requirement to comply with the Uniform Net Capital Rule 15c3-1 may limit Public Ventures’ ability to issue dividends to its parent company.

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Indemnification Provisions

Public Ventures has agreed to indemnify its clearing brokers for losses that the clearing brokers may sustain from the accounts of customers. Should a customer not fulfill its obligation on a transaction, Public Ventures may be required to buy or sell securities at prevailing market prices in the future on behalf of its customer. The indemnification obligations of Public Ventures to its clearing brokers have no maximum amount. All unsettled trades at December 31, 2022 and 2021 have subsequently settled with no resulting material liability to Public Ventures, LLC. For the years ended December 31, 2022 and 2021, Public Ventures had no material loss due to counterparty failure and had no obligations outstanding under the indemnification arrangement as of December 31, 2022 and 2021.

Invizyne Funding Requirements

The Company entered into a funding agreement (the “Funding Agreement”) to purchase shares in Invizyne up to a maximum of $5,000,000 at a pre-determined purchase price, subject to continuing financial covenants being met. As of December 31, 2022 and December 31, 2021, $5,000,000, the maximum amount, and $3,644,930 have been funded, respectively. Bringing the ownership interest of the Company in Invizyne to 59.00% and 56.4% at December 31, 2022 and December 31, 2021, respectively. The Company waived its 10% funding commission payable in cash under the Funding Agreement in exchange for other modifications to the agreement. As a condition of the Funding Agreement, warrants to purchase 197,628 shares of Invizyne common stock were issued (the “Funding Warrants”), which vest as amounts are funded. Through December 31, 2022 and 2021, respectively, 197,628 and 144,071, respectively, of Funding Warrants have vested. These warrants are eliminated in consolidation.

MDB Capital Holdings, LLC waived its 10% cash fee relative to the Funding Agreement in exchange for other modifications to the terms of the agreement.

Trends, Events and Uncertainties

Other than as discussed above, we are not currently aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition in the near term, although it is possible that new trends or events may develop in the future that could have a material effect on our financial condition.

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BUSINESS

Overview

MDB was founded in 1997, originally operating as MDB Capital Group, LLC, for the purpose of engaging with companies holding visionary technology, inventors, and technology entrepreneurs. To maximize the impact of our actions and culture, under our business plan, we embark on each journey with a company at an early point, typically acting as founders and providing the initial rounds of capital, in the manner of a partner and usually before a specified management structure has been put in place. Part of our role as founders often includes locating the technology that will form the basis of the new enterprise. The technologies may be found in universities, in larger companies where it is not being used or understood, in start-up companies, and with inventors. Not only do we act as founders and providing the first capital rounds, we assist with structuring the plans for the company development, such as the steps from research and development to initial commercialization, the intellectual property strategy, business objectives, and financing. We refer to these subsidiary companies as “partner companies.”

Our model typically includes a two-step financing approach with our partner companies: we put in seed capital, as founders, and the first round of capital between $5 to $10 million dollars to set the business on an operational foundation. Our plan is to then raise an additional amount of substantive capital to bring the technology closer to validation or to be able to commence commercialization, typically in the range of $20 to $60 million and often via a public offering or an alternative value realization. Our community of sophisticated individual investors with like-minded goals and values supports our model, with their capital, knowledge, connections and expertise. We anticipate that value creation will be generated after years of patient ownership and corporate effort, and value realization might include any number of methods, such as continued holding and operating, initial public offerings, or IPO, joint ventures, licensing, asset sales and merger transactions, depending on the particular business model and industry.

We believe that we successfully have used the private and public capital markets to finance growth companies. Being able to find disruptive technologies to develop, acting as corporate founders, owners, directors and management, and conducting financing activities for those companies in which we are strategically involved for the long term, we believe we have a different model of helping companies grow than that of the typical private venture capital model. We refer to our approach as public venture capital. We find the technology and then we work to analyze the technology leadership position by our surveying the marketplace so as to establish a research and development and intellectual property development strategy to create a dominant position in the distinct technology vertical. Then we create the basic company, we set up its management, we define its business plan, we nurture its enterprise, and we provide its financings in its early stage rounds, and then we likely will act as the underwriter or selling agent for their IPO, other financing or disposition. It is our plan to remain involved with our partner companies for the long term. Where there is an IPO, we stay on for several years thereafter, by being members of the board, having consulting agreements, providing strategic business advice, and participating in, advising on or facilitating further financing rounds. We believe, most importantly, that one gauge of the partner company success is that the partner company will successfully completed public and private follow-on offerings to continue supporting their research, development, growth and marketing of their technologies’ potential. MDB, we believe, builds value by building partner companies with the right foundations

Past Examples

We believe that we successfully have used the private and public capital markets to finance growth companies. Being able to find disruptive technologies to develop, acting as corporate founders, owners, directors and management, and conducting investing activities for those companies in which we are strategically involved for the long term, we believe we have a different model for helping companies grow than that of the typical private venture capital model. We refer to our approach as public venture capital. We find the technology, and then we work to analyze the technology leadership position and survey the marketplace so as to establish a research and development and intellectual property development strategy to create a dominant position in the distinct technology vertical. Then we create the basic company, we set up its management, we define its business plan, we nurture its enterprise, and we facilitate its financings in its early-stage rounds of private funding, and then we likely will act as the underwriter or selling agent for their IPO, other financing or disposition. It is our plan to remain involved with our partner companies for the long term. Where there is an IPO, we stay on for several years thereafter, by being members of the board, having consulting agreements, providing strategic business advice, and participating in, advising on or facilitating further financing rounds. We believe, most importantly, that one gauge of the partner company success is that the partner company will successfully complete a private and public follow-on offering to continue supporting their research, development, growth and marketing of their technologies’ potential.

Our latest three companies for which we started as founders and for which we conducted their IPOs, have traded for a period of time at near or over $1 billion in market value, which we believe is crucial for maximizing the probability the companies can raise sufficient capital to get to commercialization These companies are as follows:

● Provention Bio, Inc. (“Provention”). Provention was established in 2016. Public Ventures created Provention to license molecules from several larger pharmaceutical companies, provided seed capital, engaged the initial board of directors’ members, and recruited C-level executives. Messrs. DiGiandomenico and another employee of Public Ventures, Mr. Cameron Gray, were among the initial directors of Provention. These persons and Public Ventures received founder shares. Public Ventures conducted a first raise financing on a private placement basis in April 2017. Provention did its initial public offering July 2018, in which Public Ventures was the underwriter. Messrs. DiGiandomenico and Gray continued as directors after the IPO, with Mr. Gray continuing until May 2019 and Mr. DiGiandomenico continuing until May 2020.

● Cue BioPharma, Inc. (“Cue”). Cue was established in 2014. Public Ventures created Cue to license a platform technology from Einstein University, engaged the members of the board of directors, recruited C- level executives and, formed the corporate strategy. Messrs. Marlett and DiGiandomenico were among the initial directors of Cue and an employee of Public Ventures was the initial chief financial officer of Cue. Later two employees of Public Ventures, Mr. Cameron Gray and Amy Wang were added to the board. These persons and Public Ventures were the founders and received founder shares. Ms. Wang resigned in 2018, Messrs. Marlett and DiGiandomenico resigned in 2019. Public Ventures did a first raise financing on a private placement basis in June 2015 and a subsequent capital raise on a private placement basis in December 2015. Cue did its initial public offering December 2017, in which Public Ventures was the selling agent. Public Ventures recently completed in November 2022 an private placement offering for Cue.

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● Pulse Biosciences, Inc. (“Pulse”). Pulse was established in 2014, in a corporate reorganization lead by Messrs. Marlett and DiGiandomenico, and two employees of Public Ventures, Ms. Amy Wang and Mr. Robert Levande. Mr. Marlett and Ms. Wang located the technology and did a roll up of patents from two universities and a private company to form Pulse. Mr. Marlett, Mr. Levande and Ms. Amy Wang, another employee of Public Ventures, were the initial directors. These persons and Public Ventures received founder shares. Public Ventures did a first raise financing on a private placement basis, in November 2014. Pulse did its initial public offering in May 2013. Mr. Levande continued as a board member until November 2017.

Key Pillars

Since inception, we have defined and refined the key pillars that support what we believe is our successful company creation approach. These pillars are defined in Our Partner Company Criteria section. We believe that our model is only suitable for companies that can be sustained in the public markets at an early stage. Typically, these companies own what appear to be category-defining platforms capable of solving big problems.

We have established a process to position partner companies for success, with the intention of maximizing the value early in a company’s history. We seek to create a strong foundation during the development phase of the partner company. We believe that this helps the partner company attract the best people who are capable of building a successful enterprise over the long term. We call this our “Rational Design Process For New Companies.”

A traditional perceived shortcoming of the public markets is that they attract short-sighted investors. We understand that to make early-stage public venture feasible; we need to create a community of investors that have the intention of helping our companies get off the ground. We believe our investors are committed community members who seek to create value at the companies in which they invest and are critical to sustaining value. Our investors, unlike traditional institutional investors, generally have long holding periods and value long-term impact over quarterly performance numbers.

Our Partner Company Criteria

We seek companies that we believe meet certain criteria. Our criteria focuses first on the probability that an early-stage technology company ultimately can sustain its value in the public markets. We look for novel technology platforms that are category-defining and solve big unmet needs. Our criteria are founded in the following:

- Unique Technology – Well-defined technology differentiation that enables a new category;

- Platform – Core technology can be deployed across different verticals, markets, or indications;

- Large Market Potential – Large market opportunity and/or solutions for big unmet needs;

- Early Inflection Point – Reasonable timeline and cost required to validate technology feasibility;

- Clear Market Insertion Path – Explicit benefits driving adoption across the value chain (channel partners); and

- Strong IP Position – Robust, defensible intellectual property position with broad claims covering the invention.

Rational Analytical Process

	DEFINE		ANALYZE		DIFFERENTIATE		CONCEIVE		INNOVATE
►	Understand what has been developed	►	Players in the space	►	Gain firm understanding of competitive advantages	►	Develop a business, IP, innovation, R&D, and financing strategy to:	►	Re-evaluate and innovate continuously
►	Define the space for analysis	►	Map all IP and new inventions	►	Clearly articulate the opportunity	►	Create a new vertical or establish a leadership position in an existing category	►	Maintain category leadership or
		►	Compare how they relate to our company’s innovations					►	Pivot to new strategy when necessary

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We recognize that early visionary technologies are frail ideas that need to be nurtured correctly with the right corporate and financial foundation in order for them to become commercially viable and established companies. This is especially true with respect to platform technologies in which the overall corporate and asset development and positioning can have a drastic impact on the early development of the partner company.

We begin our process by seeking to gain a deep understanding all of the relevant players in a given space and the key issues, and how, if solved, they could effectively create a new category and enable the partner company to rapidly become a category leader. We work to develop a clear understanding of our companies’ potential sustainable competitive advantage. Once the “Theory of Opportunity” is established, we develop the business strategy, financing strategy and intellectual property strategy and the innovation and R&D prioritization road map. We test our assumptions by seeking input regarding our strategic decisions with experts in the space until we are comfortable that they are credible and convincing. With a clearly articulated understanding of what we believe to be the partner company’s potential, we endeavor to recruit the best possible talent to execute the strategy and bring the vision to fruition. We strive to instill a corporate culture that is constantly re-evaluating the partner company’s working thesis, which we believe will establish and keep the partner company as the leader in a given category or enable the partner company to pivot its strategy to a new area based upon changing circumstances.

Our Community

A key element of our public venture model is our community of more than 500 sophisticated investors, entrepreneurs and microcap and smallcap market participants who have significant experience with our approach and who we believe will advocate for our public venture mission. In addition, investors can have a significant impact by supporting the companies they invest in. We believe that this community is vital to the success of our public venture model.

We have strived to create community of like-minded persons who share our vision and are supportive of the partner companies we have co-founded. This group consists of patient company owners with a long-term focus on the value that can be unlocked upon the de-risking of our partner companies’ technologies. This long-term focus is key to building value and stability for early-stage companies in the public markets. In addition, we believe that our community members are often authorities in multiple industries and are capable of providing support to our partner companies with their invaluable access and reach. We believe that MDB shareholders will comprise this community and will continue to participate in the partner companies through their MDB share ownership as well as participation in partner company direct investment. MDB plans to sustain a cohesive community by keeping persons engaged and curious so that they continuously help us improve our decision process as and when selecting partner companies with which to work.

By becoming a publicly traded entity, we believe that MDB is strengthening our community of MDB shareholders and can simplify our process of developing partner companies. We intend to use a portion of the capital raised in this offering to identify and found partner companies. We believe that being a public company will give us greater flexibility and nimbleness to source new technologies and make it quicker and easier to deploy capital towards opportunities that arise.

We also will seek to foster community in connection with our broker-dealer, Public Ventures. In that regard, we intend to follow a “Member-focused” model (further discussed below) for conducting Public Ventures-led company financings. Our typical Public Ventures Member will be a long-term investor and/or entrepreneur who is motivated to help develop the next generation of growth companies. Public Ventures Members may or may not be MDB shareholders. Members may or may not provide direct financing to partner companies.

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Holistic and Sustainable Model

Our public venture model is fundamentally different than the typical venture capital fund model. We believe that bringing well developed early-stage companies to either the public markets or fostering a merger and acquisition exit, while still taking care to address the unique nature and needs of these early-stage companies, provides more liquidity, efficiency, transparency, better protections for investors and alignment of the interests of everyone involved as described below.

Inventors/Universities/Co-founders

Taking companies public will allow shareholders to own the same class of common stock as the company’s early founders. In addition, the ownership interests of inventors, universities, and other co-founders become valuable, tradable shares when a company is public and listed on an exchange. As a result, we believe that, in most cases, these ownership stakes will have much greater value than they would otherwise have in the traditional venture capital model. We also believe that our model gives companies greater leeway to execute pivots or to pursue other strategic initiatives, such as licensing, asset sales or corporate merger and acquisition transactions.

Partner Company Management & Board Members

We expect that the management and board members of our partner companies will benefit from the Company being public. The ability to grant valuable, liquid equity as part of an employment compensation package is a strong incentive to attract and retain employees and align their interests with those of the company at which they work. Being public can help a partner company raise substantial amounts of capital more easily than as a private company or through traditional venture capital.

MDB Shareholders

Under our model, the MDB Holdings shareholders can buy or sell their shares in the holding company at any time. These shareholders will participate in our partner companies through the holding company structure, for example through the tax benefits of holding an interest in a tax pass through entity or the overall value of the holding company as it reflects the values of our subsidiaries. Where we think it beneficial for a partner company to raise capital directly, rather than taking additional funds from the holding company, we may seek a method that can allow the MDB Holdings shareholders to participate in the additional capital formation for a partner company. There are a few means by which the MDB Holdings shareholder may participate: for example, a further private placement by the partner company, or by a registered public offering, such as an IPO or rights offering where the MDB shareholder will invest new funds based on the distributed right. If the best course of action is an asset sale, a licensing arrangement or a corporate merger or acquisition transaction of a partner company, then it is expected that MDB shareholders would receive a distribution of the proceeds as a result of the transaction. Moreover, we believe that many of the MDB Holdings shareholders own their class A common shares because they are motivated by the opportunity to contribute their knowledge and experience to and engage with our partner companies in an effort to improve them and enhance their value.

MDB Employees

Pursuant to our 2022 Equity Incentive Plan, we have granted our employees interests in the Company as part of their compensation in order to align their interests with those of our shareholders and partner company stakeholders.

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Our Holding Company Structure

While each partner company will present its own investment dynamic, at the onset, we intend to take a majority ownership stake in the partner companies we co-found and to hold a significant controlling position through the early stages of development and early capital creation. We plan on seeking one or two partner company opportunities a year, but there is no assurance that we will be able to find suitable opportunities at that rate for inclusion in the holding company.

As a partner company is financed by means other than the holding company putting in more equity capital, such as additional sales of equity by the partner company on a private or public basis, we plan to continue to own at least thirty-five percent (35%) or more of the voting stock of a partner company. We also expect to maintain the right to appoint a number of board members and otherwise be instrumental in the management and direction of the strategy and business development efforts of our partner companies for a period of time before and after each IPO.

It will be our policy to have with the stakeholders of our partner companies, where we do not have a 100% ownership position, a series of contractual rights to obtain regularly the following: (i) financial reports, (ii) milestone achievement reports, and (iii) budget formulations. Other oversight rights which we will seek to have include, (i) approval of capital raises, (ii) approval of incurring and guaranteeing debt in excess of $250,000, (iii) approval of capital expenses in excess of $250,000, (iv) approval of changes in the business plan, (v) participation in budgeting, (vi) review of employment arrangements with key employees, (vii) participation in the selection of directors and director nominees, (viii) approval of sale of the company or assets and merger and acquisition transactions, and (ix) liquidation approval. These rights will be supplemented by agreements that will afford the founders, early owners and the holding company: (i) a right of first refusal on future financings, (ii) approval right on the issuance of securities for compensation purposes and stock option plan sizing, (iii) voting agreements so as to maintain the control by the holding company, (iv) drag-along sale and co-sale agreements, right of first refusal agreement on individual ownership holdings, and (v) an investor rights agreement.

In order to not be deemed an investment company under the regulation of the Investment Company Act of 1940, MDB will not operate in a manner such that it is or holds itself out as being engaged, or proposes to engage, in the business of investing, reinvesting, or trading in securities. Additionally, it will maintain what are characterized as “investment securities” under the Investment Company Act below forty percent (40%) of the value of the total assets of MDB on an unconsolidated basis, unless an exemption or safe harbor applies under that legislation. Securities issued by companies other than consolidated companies are generally considered “investment securities” for purposes of the Investment Company Act, unless other circumstances exist that have the holding company being actively involved in the management of the underlying company. We will consolidate these companies for financial statement purposes as long as they are majority-owned subsidiaries in which we hold voting power of fifty percent (50%) or greater. We expect to continue to have an active role in the management of our partner companies for a long period of time before and after funding, such as an IPO.

Not only for purposes of the Investment Company Act, but also to maintain our focus on exploring new investment opportunities through partner companies, rather than holding partner companies for long term investment and increasing our asset base, our intention is to distribute our partner companies and excess assets beyond what is needed to support the investments we plan to make under our public venture model.

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Competition

Getting access to and deploying early-stage capital is very competitive. We believe our main competitors are traditional venture capital firms, other funds specializing in microcap and smallcap investing and investment banks focusing on microcap and smallcap companies.

We believe that our approach provides multiple benefits compared to existing models and traditional methods. However, many of our competitors are larger, have greater brand recognition, longer operating histories, established business relationships, access to greater amounts of capital, and significantly greater resources. We believe that we will be able to compete on many fronts based on our history and reputation, our plan to partner, encourage and support the development of our partner companies and their founders, our wide-ranging contacts in the financial and industry sectors, our ability to provide capital as needed, our ability to source and diligence new technologies and the experience of our professional human capital.

Our partner companies will face strong competition in multiple areas. The technology development industry is characterized by strong competition and rapid technological change. Invizyne, for example, will face competition from other synthetic biology companies developing products in yeast or other microorganisms such as Ginkgo Bioworks, Zymergen, Amyris, Gevo, Genomatica, Evolva, and others, as well as new cell-free synthetic biology companies. It will also face competition from companies utilizing traditional chemistry and/or plant-based extracts in the area of cannabinoids and whatever other natural products that it chooses to target.

Our Group of Companies

Public Ventures

Our wholly-owned subsidiary, Public Ventures, licensed under the name Public Ventures LLC, a registered broker- dealer (CRD-: 42677/SEC-: 8-49951) is the backbone of our financing business. We are currently expanding its capabilities to act as a licensed clearing firm.

The Vision

We believe that venture stage businesses are more likely to succeed when supported and financed by a community of long-term oriented, like-minded investors and entrepreneurs who are experienced in the development of successful companies. We envision developing a close-knit community of such clients for Public Ventures who we will refer to as our Public Ventures “Members.” Our Members will be able to submit start-up and developing companies as potential candidates for obtaining financing through Public Ventures and/or as candidates to become partner companies for MDB. If they so choose and as dictated by their expertise, our Members will have opportunities to assist in development of companies that we finance at Public Ventures or who become partner companies and help them grow into tomorrow’s leaders.

We believe that such a community of investors can foster the growth of promising public companies under $500 million in market value, also known as microcap and/or smallcap companies, by leveraging the knowledge of the community and sharing risk amongst its Members.

We believe that we are building a robust infrastructure to support our vision for Public Ventures. Our objective is to create a high-end service platform that will make investing in the microcap and/or smallcap segment more accessible to and efficient for the Public Ventures Member community. Part of our plan is for Public Ventures to be a FINRA licensed self-clearing broker-dealer capable of structuring and underwriting financing transactions as well as providing clearing services that will enable clients to trade, clear, and settle stocks in these companies. We are engaged in that licensing process at this time.

We have successfully operated our broker-dealer for more than 25 years during which we have specialized in transactions for public venture companies. During that time, we built internal processes to perform diligence and prioritize the financing of deals based on the investment criteria that we have developed. We intend to leverage the lessons we have learned during these experiences to create processes, rating systems and reports that will be made available to our Member community and can be used to supplement their own processes for evaluating each opportunity and associated risks and making informed investment decisions.

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Our Principles

Our investment and operational principles play a substantive role throughout our organization. They are at the heart of our decision-making, determine our priorities, support our vision, and shape our culture. These principles are the main drivers of our business:

(1) Our primary mission is to enable promising companies to meaningfully improve humanity through the sponsorship of people and their businesses.

(2) We look to elevate each company with our collective experience by offering insightful and thoughtful feedback. We believe that advice and mentorship, in many respects, are more valuable than money. It takes a village to raise a company.

(3) We recognize that struggling and learning together is the basis of creating meaningful relationships. During difficult times in the markets, our community relationships will sustain our enthusiasm for and focus on our mission.

(4) Company leadership requires a vision, a plan for execution, and, importantly, accountability for execution with kindness, as every team member needs guidance that motivates them.

(5) We reason from first principles, not by analogy. John Kenneth Galbraith said, “The conventional view serves to protect us from the painful job of thinking.”

(6) We believe in growth by opening ourselves to our fellow Members for advice and by being introspective. Our collective reputation for fair and honest dealing will be our greatest long-term asset.

(7) By being diligent and disciplined, we can help companies create the best version of themselves.

(8) Great discoveries and achievements usually require the collaboration of great minds. We will help our leaders pitch the vision for the company in the absence of certainty, relying always on clarity and transparency.

(9) Our Members seek the real art of conversation, which is not only to say the right thing at the right time but also to leave unsaid the wrong thing at the tempting moment.

(10) Long-term sustainability comes from doing the “right thing” (as hard as it may be) in the short term.

The Public Venture Opportunity

Historically, the public markets have served as a significant funding source for companies with new ideas and enabled the growth and development of visionary technologies that lead to advancements in our society. We believe that venture investing in the public markets is the most transparent and liquid method for investors to participate in venture capital. Public venture is available to all classes of investors who all receive typically equal amounts of information about their investments. Companies like Amazon, Tesla, Walmart, Home Depot, among others, were brought public at very early stages, and capital provided through the public markets enabled their spectacular development into industry leaders.

Market dynamics have resulted in companies backed by traditional venture capital staying private for longer periods of time. In addition, regulatory changes affecting broker-dealers have resulted in a shift to high volume trading that relies on payment for order flow to make up for commission-less trading. This has resulted in broker-dealers devoting more resources to trading high volume popular equities and away from providing service to microcap and small-cap public venture companies and their securities. As a result, the needs of long-term investors looking to support venture stage public companies and those of venture stage companies are not addressed by today’s brokerage firms who cater to traders.

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We believe that the expected Public Ventures Member community, consisting of sophisticated individual investors, who are aware of the nature of venture investments and seek to build tomorrow’s leading companies, can drive the future of public venture capital formation. We believe that only this type of community can provide suitable financing options that will meet the needs of small public venture companies. We have the unique opportunity to provide the right framework and platform infrastructure to this community that will enable its Members to collectively underwrite public venture financings.

We expect our Members to be entrepreneurial and involved in different ventures. Under our framework, they will be encouraged and rewarded for successfully identifying business and ownership opportunities for the community that meet our criteria. We envision that our platform will encourage and allow Members to share information and formulate the nature of and pricing for any financing opportunities through the exchange of information about a particular opportunity. In addition, our framework is expected to consist of conducting diligence, creating comparative analysis, providing company information, and implementing rating systems. We believe that this information and transparency will enable high quality, informed decisions and facilitate market integrity.

Members and Member Sponsors

It is our intention to build our community of participants who share the collective goal of elevating and supporting development-stage companies and have an investor rather than a trader mindset. Persons who share the values and vision of the organization can be invited into the community as Members. We expect to encourage active participation of our Members such that they may be mentors of growth through starting, running, or connecting companies within the community or by being active early investors in the various business and ownership opportunities that arise. We plan to sponsor community Member forums, organized by geographic location, investing style, subject matter expertise and/or industry segments. We believe these forums will facilitate in-person meetings with companies, enable due diligence, and support investor engagement and camaraderie.

Members who originate business opportunities for the community will be known as “Member Sponsors” and will have additional roles, as regulations permit, in the financing of our partner companies. A Member Sponsor likely will be a liaison among a company looking for financing, Public Ventures’ internal team, and our community of Members. They will help the potential partner company complete required documentation, shepherding the company through the diligence process, and fostering introductions to Members and coordinating roadshow meetings. To the extent required, Member Sponsors will hold the required securities licenses and registrations.

Processes

We believe that establishing a process that is transparent, thorough, efficient, and timely is essential for the success of Public Ventures. We are building the right infrastructure to support our processes, including the human capital and technology. The following diagram demonstrates the deal process at Public Ventures.

Deal origination and execution process:

● A member sponsor identifies a company in need of financing and is appointed via an engagement letter where the company acknowledges the diligence and sales process and the roles and responsibilities of the member sponsor.

● Public Ventures diligence team prepares a company summary with the information provided by the member sponsor and presents the summary to the investment committee of Public Ventures.

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● The investment committee, formed in compliance with applicable securities and FINRA requirements, is intended to be comprised of Members and select MDB employees, will analyze the summary and present a preliminary decision to the member sponsor.

● If the preliminary decision is positive, the start-up company will engage Public Ventures for a comprehensive due diligence report which includes a confidential discussion with key opinion leaders for feedback.

● The investment committee, after study and deliberation of the comprehensive diligence report, shall issue a formal opinion regarding the feasibility of the deal.

● If the investment committee issues a positive opinion and expresses confidence as to the potential success of a deal, then an engagement agreement for an offering is executed and deal is thoroughly prepared.

● The deal is presented to the community for pricing and closing.

Public Ventures Launch

We intend to launch by:

● Converting a small number of existing accounts to the trading and clearing platform to ensure that our systems running smoothly.

● Bringing together our Member community with events that include respected thought leaders in public venture microcap and smallcap investing. These events are intended to seed key investment centers (or chapters) in the US and to identify local Members to lead such chapters to build out local Public Ventures’ communities.

● Refining our diligence, rating systems, and reports processes to ensure that they can be deployed successfully.

● Creating roadshow programs and processes for investor-led-financings

● Training member sponsors to execute the transparent diligence processes that we have developed.

Sustainable Business

We believe that a key to operating sustainably in the development and financing of microcap and smallcap businesses is to offer services to investors that participate in this segment and business and ownership opportunities that are thoroughly vetted and well-priced. Additionally, the availability of funding for a company over time, the ownership structure, and the related cost of ownership should be geared to the nature of the opportunity so that a company has the ability to concentrate on its technology and product development. We believe that our community approach, our Member selection process, and our diligence processes, will provide that support and will lower our cost structure.

Efficient Back Office Support

We have an out-source service contract with a Nicaraguan company with which the Company has worked for many years. The company, MDB Capital, S.A. is owned by two of the principal shareholders and officers of the Company. The services that the Company expects to out-source to the service provider will include administrative services to support Public Ventures and PatentVest, such as back office services related to brokerage and clearing firms, background investigations, preparing investment research reports, patent searches and analysis, and customer support services. Services that will be requested will be only those that can be provided by an out-source company within the context of U.S. privacy laws, FINRA regulation, and other applicable U.S. financial service and other regulation.

Based on recent Executive Orders imposing new and expanding prior sanctions on Nicaraguan businesses and on U.S. persons doing business in Nicaragua, however, there may be disruption to our being able to contract for out-sourced services with Nicaraguan entities. Therefore, we may have to adjust our business plan accordingly.

PatentVest

PatentVest is currently expanding its business operations. We believe PatentVest can become the first venture invention and commercialization intelligence platform created to assist technologists, advisors, venture capital investors, and established companies optimize technology commercialization. Our process takes in information from our proprietary patent database and transforms the information about inventions and intellectual property from a complex legal process into a manageable, measurable business process. The PatentVest process clearly defines the boundaries of an invention by providing context for previously developed ideas and analyzes how the invention, and therefore patent claims, differ from the discovered prior art in order to rationalize the essential distinctions that are the key value drivers. Understanding these boundaries, as well as how protectable and valuable these boundaries are, is essential to better guide strategic business and patentability decisions. In our experience, this PatentVest process answers the most important questions for a technology platform: how to innovate, how to improve its ideas, and how to deploy these ideas where they matter most.

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Our innovation in a box process seeks to include the following elements and outcomes:

● Improve idea prioritization – Allows inventors and financial backers to weigh the value of a given idea by ascertaining the uniqueness of such invention.

● Enhance the value of an invention – Understanding invention boundaries allows patent attorneys to draft patent claims in a way that confers the most available protection without being encumbered by prior art.

● Optimize strategic decisions – Deeply understand the competitive landscape, identify issues that possible partners are trying to solve, prioritize markets where an invention might be the most valuable, and identify possible acquirers.

PatentVest History

Eighteen years ago, PatentVest’s founders recognized that intellectual property was the most valuable asset for technology companies and began building a proprietary patent database and software platform to help companies manage these assets. During these years, PatentVest has been continuously iterating uses for available information to potentially enable better investment decisions as well as to guide the development of such technology once investment decisions were made. We believe that PatentVest has helped start-up companies move from having novel ideas to becoming technology leaders. As a result, in our opinion, PatentVest is capable of providing the backbone of an investment idea selection process, as well as forming intellectual property and business development strategies. We believe utilizing the PatentVest Innovation in a Box process will enhance our ability to optimize our selection process with respect to partner companies as well as when selecting underwriting candidates for Public Ventures.

We also believe that the PatentVest services will aid companies to define their intellectual property assets in their capital raising activities and will be available to other companies that see to build their intellectual property outside of the context of working with MDB and Public Ventures.

PatentVest Objective

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PatentVest starts with a technology assessment, where it evaluates the technology to establish whether or not the technology is unique and a company can create a leadership position with the identified intellectual property. Assessment is extensive covering an investigation into the players in the particular industry space, whether the technology truly is innovating, can value be created with the technology, what is the market and can there ultimately be value creation. The assessment phase includes an examination of existing patents and applications, scientific publications and other public data. After the assessment, a strategy is developed, which will include where to focus R&D, what to patent or keep as a trade secret, and the jurisdictions in which to protect the intellectual property, and based on the assessment and strategy, help develop a business plan to progress the intellectual property. PatentVest also may provide development budgets and help identify critical persons with which to work. PatentVest will be able to implement prosecution of patents and other intellectual property, maintain surveillance of the intellectual property space, and provide reporting on developments in the particular intellectual property space.

We believe that the PatentVest process will provide a fundamental advantage to helping create a leadership position for a company with unique intellectual property. By knowing and understanding the particular intellectual property space, having a focused R&D and intellectual property development plan, a coherent business plan, and providing the related aspects of setting up a development company with the right persons and financial backing, the success of the company in being a value creator in its industry vertical is improved. As part of this overall process, the involvement of Public Ventures can add to the value creation with its financing resources.

It has been our experience when evaluating, investing in or advising technology companies that intellectual property strategy development and related processes are most often led by attorneys and is separate from the other invention and business processes at these companies. We have seen that this work is typically outsourced and, as a result, key company personnel are often neither engaged in the claim drafting process nor are aware of how their patents have potentially changed during prosecution. Many of the inventors and business executives with whom we have engaged have a modest knowledge regarding what their claims cover or what the boundaries of their claims are in relation to other companies. We believe that it is very difficult, if not impossible, to truly understand either what a company “owns” or to effectively evaluate a given invention’s potential uniqueness and ultimately its potential value without this perspective.

We believe the companies that will derive the greatest benefit from PatentVest’s services are technology companies with a few current active patent applications that are expected to primarily drive the value of their companies with their inventions. The analysis and information provided by the PatentVest process, as documented in reports to its clients, is expected to guide technology companies as they seek to prioritize ideas and develop their intellectual property and business strategies. We believe that PatentVest will not only provide MDB with additional clarity in selecting its partner companies and Public Ventures in selecting underwriting candidates, but also to any technology company in their decision-making processes seeking to maximize the value of their inventions.

The PatentVest Model

We plan to use PatentVest to help technology companies innovate and deploy their innovations in the most valuable manner as well as to support our processes. We believe that PatentVest has one of the most comprehensive global patent databases available, containing more than 148 million patents and covering 116 countries. PatentVest has built software processes and tools that make it possible to efficiently mine vast amounts of data and structure this data in a way that can be analyzed by its team of analysts. In addition, PatentVest has assembled the human capital required to cost-effectively analyze such data and build the reports for companies that are expected to be the backbone of our services.

PatentVest has developed different report formats that provide information within context in a way that we think can be quickly processed by decision-makers and help provide answers to the most valuable questions for the companies we will target as our business development opportunities. The insights presented in our reports are the culmination of a long, iterative process that we have refined by the constant questioning of which data is valuable to building technology companies.

PatentVest Reports and Solutions

PatentVest has strived to provide focus and insight within its reports and solutions. Other traditional patent data providers with whom we compete focus for the most part on presenting only data. The PatentVest reports, solutions, and feedback are focused on providing strategic guidance to answer technology companies’ most pertinent questions.

Prior Art Plus: The Prior Art Plus report is an entry-level report that provides the basic information to assist in understanding the value of a given invention. It identifies key patents and publications relevant to a specific invention, provides an understanding of the history of a technology space, depicts the key players and their patents, and provides an overview of the countries where patents are being filed. This data provides the tools necessary to quickly ascertain the value of a given invention or patent while identifying core aspects that could serve as differentiators for developing a potentially new invention. Moreover, by understanding how claims have changed during prosecution, this report could deliver insights into how broad or narrow a patent might be. Understanding the protection conferred by a patent and the value of such protection can lead to better prioritization decisions over the jurisdictions in which to apply for patent protection, should a global protection strategy be considered. The ultimate goal is to maintain valuable patents that are in alignment with a company’s business, IP and R&D strategy, which we believe leads to a capital-efficient technology business.

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Targeted Landscape Report: The Targeted Landscape report is a premium-focused report offering. It seeks to answer the question of “who is developing something similar to our technology?” and provide data for competitive intelligence, innovation management, M&A, partnering, licensing, IP strategy, litigation and risk management, and prosecution analysis. We believe most companies are unaware of true direct IP competitors operating in their space, which leads to a poor IP and business strategy. Moreover, the knowledge of competing patents and the structure of these claims allows companies to strategically craft their claims for broader coverage. A Targeted Landscape report usually analyzes 25-300 patent families.

Broad Industry Landscape Report: PatentVest offers two versions of a broad landscape report: the top innovator’s awards report and a custom report. The top innovator’s awards report covers top assignees in a specific space focusing on topical landscapes for new/trending industries, in which assignees have valuable patents and a strong IP position. The custom report will be created specifically for a client in a particular industry or technology sector. The Broad Industry Landscape report analyzes 5,000 to 10,000+ patents to provide a high-level overview of how companies are applying a specific technology or how different technologies are being deployed across a particular market. In other words, this report answers, “which companies are in the space?” and “what are they doing?”. Such answers and data, we believe, allow the client to identify and investigate adjacent market verticals and technology categories that a company could both create and lead, as well as to explore different potential applications of their technology.

Competitor Watch: Competitor Watch identifies and monitors competitors by actively observing the changes in direct competitor patent filings. This report allows a company to efficiently keep track of competitors’ technology innovations and strategic direction. We believe tracking patent filings can allow a company to have an early understanding of a competitor’s strategy and could be valuable to guide business and R&D strategy to maintain technology leadership.

Prosecution Monitor: Prosecution Monitor keeps track of a company’s and competitors’ patents in prosecution. Patents are traditionally written broadly and might be subsequently narrowed during prosecution. Strategically monitoring and managing the prosecution process can lead to claims that better protect the invention. Additionally, a competitor’s application that could be considered problematic might get narrowed significantly during prosecution. The information covered in this report includes amendments to claims, rejections, prior art cited by the examiner, applicant arguments, and notice of allowance.

Additionally, we will offer two annual enterprise solutions. These solutions will be offered after the completion of a Prior Art Plus report depending on a company’s needs.

Strategic Compass: Our Strategic Compass solution includes annual Targeted Landscape and Competitor Watch reports. Strategic Compass is designed to help companies keep track of a few innovations in a given space and provides them with a framework to transform innovation into a manageable business process.

Strategic Co-Pilot: Our Strategic Co-pilot solution includes an annual Targeted Landscape, Competitor Watch, Prior Art Plus reports on all invention disclosures, and Prosecution Monitor reports. It also includes Invention Management, which we have conceived as a process to filter new ideas and determine if a company should file a new patent for an invention or keep it as a trade secret. Strategic Co-Pilot is our most comprehensive offering and we intend to introduce it to companies that have used our Strategic Compass solution but have increased needs warranting additional services.

PatentVest as a Law Firm

On September 20, 2022, the Supreme Court of the State of Arizona licensed PatentVest to practice law as an Alternative Business Structure, or ABS. An ABS is a business entity that includes non-lawyers that have an economic interest or decision making authority in a law firm. We intend to develop and maintain a team of highly trained legal professionals and staff that will principally provide legal services related to intellectual property matters under federal law. Matters that we will be undertaking will generally be patent prosecution and intellectual property protection. Through offering legal services we intend to enhance the value of inventions by addressing questions of strategy and perspective along with the technical merits of an invention. The provision of legal services by PatentVest will be limited to those technology companies specifically engaged by PatentVest for such services and is intended to provide all the rights and privileges of the attorney-client relationship.

Because the only other state that permits an ABS like ownership is Colorado, which is a more limited authorization than afforded by Arizona, PatentVest will not be able to expand its Arizona ABS into other states. The focus of the PatentVest ABS is on patent issues and patent prosecution which is largely a federal practice, therefore the restriction of its practice to the State of Arizona is not seen as a limitation. Where it has clients that seek legal representation outside of the State of Arizona, the PatentVest ABS will make referrals to firms licensed in appropriate jurisdictions.

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Invizyne

Invizyne, a partner company, was created in early 2019 with the vision of simplifying nature by using nature’s building blocks to create molecules of interest. Invizyne has differentiated technology underlying its unique synthetic biology platform which potentially solves the inherent production bottlenecks of certain legacy technologies. The promise of synthetic biology, we believe, has no bounds. If Invizyne’s technology platform is successful at an industrial scale, we believe that it could significantly impact several industries by enabling the exploration of a large number of molecules and properties found in nature. For example, we believe that therapeutic molecules found in nature could be tested for efficacy and quickly created and scaled. Examples of where this has been important include with respect to multiple cannabinoids and other natural compounds, quick replication of novel properties of rare chemicals found in nature, creation of natural flavors and fragrances to naturally enrich food, and the sustainable creation of fuel from renewable energy sources.

Synthetic biology at its core re-wires a unicellular organism, such as yeast, via genetic engineering to produce desired molecules. The problems with traditional methods of producing molecules such as chemical synthesis and extraction include the expense and damage to the environment. For example, chemical synthesis methods are traditionally inefficient, produce significant waste, are often dependent on petroleum-derived chemicals, and expensive. Natural extraction also can be taxing on the environment due to inefficiencies when desired compounds are only found in small concentrations. In addition, it has long production cycles and presents issues with foreign contaminants. The promise of synthetic biology over these traditional methods is that desired molecules can be produced in sustainable ways, production can be scaled consistently and reliably, rare molecules can become readily available, and new and novel compounds can be more readily accessed.

Invizyne identified a fundamental problem in synthetic biology and set out to solve it– namely, that engineering a cell involves engineering a multitude, perhaps thousands, of interrelated and/or interdependent processes and systems. As a living, breathing metabolic entity, cells have evolved and intricately balanced systems that permit survival and success. Within each cell, myriad enzymes turn starter molecules into others and some of these molecules are essential for the survival of the cell while others are waste compounds. The field of synthetic biology seeks to modify cells to express different enzymatic pathways to produce a given molecule. The drawback of this approach is that of the inherent difficulties of dealing with an organism and the complexities noted above. The strain engineering process, which results in an organism that will produce the molecule of interest, is an expensive and long iterative process in which the survival of the cell is balanced with the productivity of the strain.

Invizyne is pioneering multi-stage enzymatic bioconversions that are fully cell-free. Invizyne believes that its process, named SimplePath, solves the inherent limitations of traditional synthetic biology. SimplePath uses only the specific enzymes that are involved in the process of making the molecule of interest, therefore radically simplifying the process. Not being bound to the limitations of traditional synthetic biology brings several advantages, including:

● Simplified reactions;

● More flexible systems with variants made by swapping single or group of enzymes

● Increased scalability;

● Faster and cheaper R&D; and

● Lower cost due to higher productivity and lower CapEx.

Invizyne believes that SimplePath can significantly enable the scalability of synthetic biology. Decoupling the enzymes from a cell’s metabolism, we believe, can greatly increase productivity and throughput while simplifying product development. These benefits, we believe, will allow Invizyne to make the same amount of product using a much smaller footprint and reactor size that will potentially result in lower production costs and CapEx. Invizyne’s systems have both fast conversion times as well as the ability to keep reactions running continuously for long periods of time, both of which increase the ability to produce molecules of interest more efficiently. Additionally, it is believed that the simplicity of Invizyne’s systems will allow faster design, build, test, and learn development cycles for new products thereby increasing the feasibility of creating more products and novel molecules.

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Invizyne’s core inventions relate to enzyme and co-factor recyclability, which are both key to maintaining the energy balance within an enzymatic system and enabling reactions to run continuously for long periods of time. Invizyne initially licensed a portfolio of patents from University of California Los Angeles (UCLA) and has since filed for several additional patents in addition to developing significant know-how in connection with its systems that it has elected to maintain as trade-secrets. This basket of IP protects different aspects of Invizyne’s co-factor regeneration system, cannabinoid pathways, novel molecules, and stable enzymes. Invizyne believes that its IP portfolio will be significant in defining its position in the field of cell-free enzymatic bioconversions.

Invizyne has been awarded grant funding in excess of $10 million from different institutions, including Department of Energy, Advance Research Projects Agency – Energy, Small Business Innovation Research, and the National Institute of Health. The Invizyne scientific team has published 9 academic papers in reputable journals, including Nature, about cell-free synthetic biology processes and topics.

Invizyne is currently focusing on the development of high-value molecules in markets with quick paths to commercialization. Invizyne is validating SimplePath by undertaking efforts to demonstrate linear scale while maintaining high productivity in a commercially-relevant product within a short period of time. As a demonstration, Invizyne has scaled production of cannabigerolic acid (CBGA) from 1ml to up to 100 liters, a 100,000x increase, and in the process and to its knowledge, maintained productivity at a rate several times higher than competitors. While there can be no assurances that Invizyne will be able to achieve production on a commercial scale as a result of increasing the scale of the CBGA reaction volume from 1 ml to 100 liters, Invizyne believes that it will be successful in scaling its SimplePath systems to commercial production. Once Invizyne has established manufacturing feasibility at scale with established molecules, it intends to develop a portfolio of products that will include both proprietary and rare molecules.

Invizyne also intends to partner with research organizations to validate its ability to produce several novel and rare molecules and as well as with pharmaceutical organizations to seek value creation and commercialization opportunities. Invizyne believes that, as a result of the many clinical trials underway for cannabinoid and other natural molecules showing activity across a range of different indications, there is currently a big shift in contemporary understanding of the therapeutic potential of cannabinoids and other natural molecules. Invizyne believes that its process is potentially well-suited to take advantage of the trends around natural molecules by being able to meet their requirements of pharmaceutical companies for pure and consistent products. Invizyne also believes that its system is better suited for making a wide range of active pharmaceutical ingredients, including novel cannabinoids and other molecules, each potentially having different therapeutic properties.

Additionally, Invizyne is making substantial inroads in the space of 2G biofuels by both pioneering effective methods to make isobutanol at titers and scales that would otherwise be toxic to cellular organisms as well as upgrading ethanol to other more useful and higher value products.

Invizyne is currently exploring a number of commercial engagements, collaborations, partnerships and joint venture opportunities that could permit market insertion and accelerate the commercialization of Invizyne’s technology. At this time, however, it does not have any agreements or arrangements for the commercial application of any of its intellectual property. Additionally, it cannot predict the time frame in which it may enter into its first agreement for the pursuit of a commercial application. As the field is novel, as mentioned herein, Invizyne believes it will take a substantial time to get to a commercial product.

The viability and benefits of Invizyne’s pipeline products discussed above may be difficult to assess because SimplePath is a relatively novel and complex technology. SimplePath systems and the resultant pipeline products are in various stages of the research and development phase, the pilot production phase and/or in pre-clinical assessment as a therapeutic. It is often an issue that what is possible in the small quantities used at the research level cannot be replicated as production quantities are increased for testing and commercialization. Each pipeline product will be required to be progressively scaled up from early research production quantities to show the feasibility of production in larger quantities, whether for clinical evaluation, testing, and ultimately commercial manufacturing amounts before being made available to clients. As Invizyne continues to develop and optimize SimplePath systems to make its pipeline products in the quantities needed for research, clinical or testing evaluation and manufacturing, there can be no assurance that such pipeline products will be understood, approved, or accepted by clients, regulators and potential investors, that the relevant SimplePath systems can be commercially manufactured, or that it will be able to sell pipeline products at competitive prices and with features sufficient to establish demand and generate revenues or any level of profit. Another consideration is if a pipeline product is a candidate as an active pharmaceutical ingredient, then it will require FDA or any other applicable regulatory approvals, including manufacturing approvals, which may not be obtainable. If it is unable to convince potential clients of the utility and value of its pipeline products, it will not be successful in entering the markets that it has identified, and its business and results of operations will be adversely affected.

Regulation

Broker-Dealer Regulation

Our broker-dealer subsidiary, Public Ventures, is subject to regulations governing every aspect of its securities business, including the execution of securities transactions; capital requirements; record-keeping and reporting procedures; relationships with clients, including the handling of cash and margin accounts; the experience of and training requirements for certain employees; and business interactions with firms that are not members of regulatory bodies. As a participant in the financial services industry, it is subject to the complex and extensive regulation of the U.S. federal and state regulatory agencies, self-regulatory organizations and securities exchanges and certain other authorities with oversight on banking and money laundering. The laws, rules and regulations comprising the regulatory framework applicable to broker-dealers are constantly changing, as are the interpretation and enforcement of existing laws, rules and regulations. The effect of any such changes cannot be predicted.

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Public Ventures is registered as a securities broker-dealer with the SEC and is required to be a member of FINRA. FINRA is a self-regulatory body composed of members, such as our broker-dealer subsidiary, that have agreed to abide by its rules and regulations. FINRA may expel, fine and otherwise discipline member firms and their employees. Public Ventures is also licensed as a broker-dealer in 33 states in the U.S., requiring it to comply with the laws, rules and regulations of each state. Additionally, Public Ventures might register in additional states from time to time as needed. Each state may revoke the license to conduct securities business, fine, and otherwise discipline broker-dealers and their employees.

Public Ventures is subject to the SEC’s Uniform Net Capital Rule, Rule 15c3-1, which may limit our ability to make withdrawals of capital from the broker-dealer subsidiary. The Uniform Net Capital Rule sets the minimum level of net capital a broker-dealer must maintain and also requires that a portion of a broker-dealer’s assets be relatively liquid. In addition, Public Ventures is subject to certain notification requirements related to withdrawals of excess net capital.

We are also subject to the USA PATRIOT Act of 2001 (the “Patriot Act”), which imposes obligations regarding the prevention and detection of money-laundering activities, including the establishment of client due diligence, client verification and other compliance policies and procedures. Failure to comply with these requirements may result in monetary, regulatory and, in the case of the USA Patriot Act, criminal penalties. We are subject to the Securities Investor Protection Act of 1970, which created the Securities Investors Protection Corporation (SIPC), which provides certain client protection to clients related to their brokerage accounts. We are subject to certain treasury regulations, such as Regulation T, relating to how money may be lent to clients and used, and the rules related to margin accounts.

Broker-dealers are also subject to ongoing duties of financial responsibility, client protection and good conduct. These include, among other things, (i) client funds and securities must be segregated from the broker-dealer’s proprietary business operations, (ii) maintaining basic bookkeeping requirements including records of trades, receipts, positions held in different securities, trial balances, complaints, and compliance, together with reports to be filed periodically, (iii) executing orders on behalf of clients to ensure the best execution possible, disclosing information relevant to investors, charging prices in line with market conditions, and disclosing conflicts of interest, (iv) only recommending investments or strategies that are suitable for the clients concerned, (v) communicating in a fair, balanced, and not misleading way with clients, (vi) observing rules concerning maximum value of gifts made to clients and political contributions, and (vii) filing reports of any suspicious activities noted by the broker-dealer, including investments over predefined monetary limits.

SEC Regulation Best Interest requires that a broker-dealer and its associated persons act in a retail client’s best interest and not place their own financial or other interests ahead of a retail client’s interests when recommending securities transactions or investment strategies, including recommendations of types of accounts. To meet this best interest standard, a broker-dealer must satisfy four component obligations, including a disclosure obligation, a care obligation, a conflict of interest obligation, and a compliance obligation, and both broker-dealers and investment advisers are required to provide disclosures about their standard of conduct and conflicts of interest.

In addition to the SEC, various states have proposed or adopted laws and regulations seeking to impose new standards of conduct on broker-dealers that, as written, differ from the SEC’s new regulations and may lead to additional implementation costs if adopted. The SEC did not indicate an intent to preempt state regulation in this area, and some of the state proposals would allow for a private right of action.

Various regulators, including the SEC, FINRA and state securities regulators and attorneys general, conduct both targeted and industry-wide investigations of certain practices relating to the financial services industry, including sales and marketing practices, valuation practices, and compensation arrangements. In addition, the SEC staff has conducted studies with respect to soft dollar practices in the brokerage and asset management industries and proposed interpretive guidance regarding the scope of permitted brokerage and research services in connection with soft dollar practices.

A variety of data privacy laws to protect personal information obligate broker-dealers to provide notice about its data handling practices, to offer certain opt-outs, and to implement reasonable security measures to deter unauthorized access. Broker-dealer internal and external electronic communications may only be made on approved devices and platforms that are encrypted and secure and will capture all communications in the broker-dealer’s records. The cost and burden of taking cybersecurity measures, having personnel oversee compliance and staying current with respect to new technology developments continues to grow.

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Our broker-dealer accounting, administrative and operations personnel are responsible for financial controls, internal and external financial reporting, compliance with regulatory and legal requirements, office and personnel services, management information and telecommunications systems, and the processing of our securities transactions. We are subject to the privacy laws applicable to financial institutions in respect of our securities business.

As is common in the securities industry, our broker-dealer subsidiary is subject to regular reviews of and investigations into our operations, some of which progress to regulatory actions that may result in fines, censures, and limitations on activity. Currently, we are the subject of two reviews of past broker-dealer activities, which may be either resolved without further regulatory action or escalated such that we could be subject to one or more penalties. At this time, we are cooperating with the reviews, and we do not know whether or not they will escalate to regulatory action and, if they do, what violations of rules and regulations may be asserted against the broker-dealer and what potential final resolutions might be.

Self-Clearing Regulation

Public Ventures is in the process of developing the capabilities of self-clearing United States equity securities. As part of this process, in addition to the broker-dealer regulation described above, Public Ventures will be subject to regulation directed to self-clearing operations that demonstrates its financial, operational and systems capacities to perform this business and being able to comply with the related regulation, including those of SEC, Depository Trust Corporation, or the DTC, and National Securities Clearing Corporation, or the NSCC. To operate the self-clearing activities we must meet different capitalization requirements to those of a broker-dealer. To do this, we will have to maintain within the capital structure various cash and cash equivalent assets and retain access to necessary lines of credit that can assure our ability to comply with changing deposit requirements of the SEC and of DTC and NSCC. We expect that these regulations will undergo substantial changes, which will require additional capital as settlement operations move to T+1 and T+0 settlement in the future.

Data Protection and Cyberattack Regulation

In the course of our operations and in the processing of transactions, we collect, process, store, disclose, use, share and/or transmit personal information and other sensitive data from current, past and prospective clients as well as our employees in and across multiple jurisdictions. The regulatory framework for privacy issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. There are federal, state and foreign laws and regulations regarding privacy, data security and the collection, processing, use, storage, protection, sharing and/or transmission of personal information and sensitive data. For example, the Gramm-Leach-Bliley Act (“GLBA”) (along with its implementing regulations) restricts certain collection, processing, storage, use and disclosure of personal information, requires notice to individuals of privacy practices and provides individuals with certain rights to prevent the use and disclosure of certain nonpublic or otherwise legally protected information. Additionally, many states continue to enact legislation on matters of privacy, information security, cybersecurity, data breach and data breach notification requirements. For example, as of January 1, 2020, the California Consumer Privacy Act (“CCPA”) grants additional consumer rights with respect to data privacy in California. The CCPA, among other things, entitles California residents to know how their personal information is being collected and shared, to access or request the deletion of their personal information and to opt out of certain sharing of their personal information. The CCPA is subject to further amendments pending certain proposed regulations that are being reviewed and revised by the California Attorney General. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. We cannot predict the impact of the CCPA on our business, operations or financial condition, but it could result in liabilities and/or require us to modify certain processes or procedures, which could result in additional costs.

Additionally, the California Privacy Rights Act (“CPRA”) was passed in November 2020 and it will be effective in most material respects starting on January 1, 2023. The CPRA imposes additional obligations on companies covered by the legislation and will significantly modify the CCPA, including by expanding clients’ rights with respect to certain sensitive personal information. The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. The effects of the CCPA and the CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.

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We expect more states to enact legislation similar to the CCPA and the CPRA, which provide clients with new privacy rights and increase the privacy and security obligations of entities handling certain personal information of such clients. The CCPA has prompted a number of proposals for new federal and state-level privacy legislation, such as in Virginia and Colorado, both with laws to take effect in 2023. It is anticipated that all such laws will add additional complexity, have variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.

Additionally, our broker-dealer, Public Ventures, is subject to SEC Regulation S-P, which requires that businesses maintain policies and procedures addressing the protection of client information and records. This includes protecting against any anticipated threats or hazards to the security or integrity of client records and information and against unauthorized access to or use of client records or information. Regulation S-P also requires businesses to provide initial and annual privacy notices to clients describing information sharing policies and informing clients of their rights.

Because the interpretation and application of many privacy and data protection laws are uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our services and platform capabilities. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our platform, which could have an adverse effect on our business. Any violations or perceived violations of these laws, rules and regulations by us, or any third parties with which we do business, may require us to change our business practices or operational structure, including limiting our activities in certain states and/or jurisdictions, addressing legal claims by governmental entities or private actors, sustaining monetary penalties, sustaining reputational damage, expending substantial costs, time and other resources and/or sustaining other harms to our business. Furthermore, our online, external-facing privacy policy and website make certain statements regarding our privacy, information security and data security practices with regard to information collected from our clients or visitors to our website. Failure or perceived failure to adhere to such practices may result in regulatory scrutiny and investigation, complaints by affected clients or visitors to our website, reputational damage and/or other harm to our business. If either we, or the third-party service providers with which we share client data, are unable to address privacy concerns, even if unfounded, or to comply with applicable privacy or data protection laws, regulations and policies, it could result in additional costs and liability to us, damage our reputation, inhibit sales and harm our business, financial condition and results of operations.

In the normal course of business, we collect, process, use and retain sensitive and confidential information regarding our clients and prospective clients, including data provided by and related to clients and their transactions, as well as other data of the counterparties to their payments. We also have arrangements in place with certain third-party service providers that require us to share client information. Although we devote resources and management focus to ensuring the integrity of our systems through information security and business continuity programs, our facilities and systems, and those of third-party service providers, are vulnerable to actual or threatened external or internal security breaches, acts of vandalism, theft, fraud or misconduct on the part of employees, other internal sources or third parties, computer viruses, phishing attacks, internet interruptions, disruptions or losses, misplaced or lost data, ransomware, unauthorized encryption, denial-of-service attacks, social engineering, unauthorized access, spam or other attacks, natural disasters, fires, terrorism, war, telecommunications or electrical interruptions or failures, programming or human errors or malfeasance and other similar malicious or inadvertent disruptions or events. We and our third-party service providers from time to time have experienced and may in the future continue to experience such instances. In some cases, the bad actors facilitated unauthorized financial transactions. We also face security threats from malicious third parties that could obtain unauthorized access to our systems and networks, which threats we anticipate will continue to grow in scope and complexity over time. These events could interrupt our business or operations, result in legal claims or proceedings, result in significant legal and financial exposure, supervisory liability under U.S. federal or state, or non-U.S. laws regarding the privacy and protection of information, including personal information, damage to our reputation and a loss of confidence in the security of our systems, products and services. Although the impact to date from these events has not had a material adverse effect on us, no assurance is given that this will be the case in the future.

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Information security risks in the financial services industry have increased recently, in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and other malicious third parties. In addition to cyberattacks and other security breaches involving the theft of sensitive and confidential information, hackers, terrorists, sophisticated nation-state and nation-state supported actors and other malicious third parties recently have engaged in attacks that are designed to disrupt key business services, such as consumer-facing websites. We and our third-party service providers may not be able to anticipate or implement effective preventive measures against all security breaches of these types, especially because the techniques used to sabotage or to obtain unauthorized access to our or our third-party service providers’ technology, systems, networks and/or physical facilities in which data is stored or through which data is transmitted change frequently and because attacks can originate from a wide variety of sources. We employ detection and response mechanisms designed to contain and mitigate security incidents. Nonetheless, early detection efforts may be thwarted by sophisticated attacks and malware designed to avoid detection. We also may fail to detect the existence of a security breach related to the information of our clients and to prevent or detect service interruption, system failure or data loss. Further, as a significant number of people work from home, these cybersecurity risks may be heightened by an increased attack surface across our business and those of our clients and third-party service providers. We cannot guarantee that our efforts, or the efforts of those upon whom we rely and partner with, will be successful in preventing any such information security incidents.

The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding our clients or our proprietary information, software, methodologies and business secrets could interrupt our business or operations, result in significant legal and financial exposure, supervisory liability, damage to our reputation or a loss of confidence in the security of our systems, products and services, all of which could have a material adverse impact on our business. In addition, there recently have been a number of well-publicized attacks or breaches affecting companies in the financial services industry that have heightened concern by clients, which could also intensify regulatory focus, cause clients to lose trust in the security of the industry in general and result in reduced use of our services and increased costs, all of which could also have a material adverse effect on our business.

Most jurisdictions (including all 50 states) have enacted laws requiring companies to notify individuals, regulatory authorities and/or others of security breaches involving certain types of data. In addition, our agreements with certain partners and service providers may require us to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, may cause our clients, partners and service providers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach. A security breach of any of our vendors that processes personal information of our clients may pose similar risks.

A security breach may also cause us to breach client contracts. Our agreements with certain partners and service providers may require us to use industry-standard or reasonable measures to safeguard personal information. We also may be subject to laws that require us to use industry-standard or reasonable security measures to safeguard personal information. A security breach could lead to claims by our clients or other relevant stakeholders that we have failed to comply with such legal or contractual obligations. As a result, we could be subject to legal action or our clients could end their relationships with us. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages, and in some cases our client agreements may not limit our remediation costs or liability with respect to data breaches.

Litigation resulting from security breaches may adversely affect our business. Unauthorized access to our technology, systems, networks or physical facilities, or those of our third-party service providers, could result in litigation with our clients or other relevant stakeholders. These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business or adversely affect our reputation. We could be required to fundamentally change our business activities and practices or modify our products and/or technology capabilities in response to such litigation, which could have an adverse effect on our business. If a security breach were to occur, and the confidentiality, integrity or availability of personal information was disrupted, we could incur significant liability, or our technology, systems or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.

We may not have adequate insurance coverage with respect to liabilities that result from any cyberattacks or other security breaches or disruptions suffered by us or third parties upon which we rely. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.

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While we take precautions to prevent consumer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of our products and services or subject us to scrutiny or penalties.

Medical Regulation

We anticipate that a number of our partner companies will be engaged in developing, testing, conducting, clinical trials and manufacturing and marketing medical therapies and devices, which has been one of our areas of interest historically. Those of our partner companies operating in the medical field will be subject to various medical- oriented regulations depending on the stage of development and areas of business endeavors they pursue.

For those partner companies involved in developing medical therapies and devices, they will be subject to the U.S. Food and Drug Administration’s, or the FDA’s, and similar foreign agencies’ requirements for testing, conducting clinical trials, documenting efficacy and safety requirements, research protocols and standards, manufacturing and many of the related obligations for record-keeping and reporting, labeling, notification, repairs, replacements and refunds, importation and export restrictions, and performance standards. The regulatory requirements imposed by the FDA and other regulatory bodies govern a wide variety of product-related activities, from quality management, design and development to labeling, manufacturing, promotion, sales, and distribution. The process of obtaining approval for clinical trials, marketing approval, authorizations, or clearances from the FDA and comparable foreign regulatory authorities for new products, or for enhancements or modifications to existing products, could take a significant amount of time, require the expenditure of substantial financial and other resources, and require rigorous and expensive pre-clinical and clinical testing. Additionally, the FDA or comparable foreign regulatory authorities could impose limitations on the indications for use of any technologies, therapies or products. The failure to receive clearance, authorization, or approval for significant new technologies, therapies and products or modifications thereto on a timely basis or at all could have a material, adverse effect on our financial condition and results of operations.

FDA and foreign regulations include ongoing compliance with good manufacturing requirements, requirements related to design controls, production and process controls, process validation, purchasing controls, supplier oversight, complaint handling and investigation, corrective and preventative actions, and record-keeping. Typically there are continuing reporting regulation that requires a company to provide information to regulators if there is evidence that reasonably suggests that a medical technologies or device may have caused or contributed to a death or serious injury or, that a malfunction occurred which would be likely to cause or contribute to a death or serious injury upon recurrence. The FDA and comparable foreign regulatory authorities also regulate the promotion and marketing of medical technologies and devices and require that manufacturers only make promotional claims or statements that are consistent with the indications and labeling cleared, authorized, or approved by the regulatory authorities.

Arizona Law Firm Regulation

The law firm owned and operated by PatentVest is subject to the Arizona Supreme Court under Rule 31.1(c) and the Arizona Code of Judicial Administration, or ACJA, Section 7.209, relating to Alternative Business Structures, or ABS. An ABS is an entity that includes non-lawyers who have an economic interest or decision-making authority as defined in ACJA 7-209 which may employ, associate with, or engage a lawyer or lawyers to provide legal services to third parties. An ABS (1) must employ at least one person who is an active member in good standing of the State Bar of Arizona who will supervise the practice of law under the rules of the Arizona Supreme Court for the entity, (2) has been licensed by the Arizona Supreme Court after application to the Committee on ABSs, and (3) will provide legal services by persons authorized to do so and in compliance with the Rules of Supreme Court as generally applied to the practice of law and the particular regulations applicable to an ABS. An approval is made in favor of an ABS application if the Committee on ABSs finds that the applicant meets, among others, the following objectives: (a) protecting and promoting the public interest; (b) promoting access to legal services; and (c) encouraging an independent, strong, diverse, and effective legal profession. The Committee on ABSs should also find that the applicant (a) has lawyers providing legal services to consumers that will act with the independence that is consistent with the lawyers’ professional responsibilities and standards, (b) the lawyers will make decisions in their practice that are in the best interest of clients, (c) the ABS maintains confidentiality consistent with Arizona Rule of Supreme Court 42, and (d) the other business policies or procedures of the ABS do not interfere with a lawyers’ duties and responsibilities to clients.

An ABS is also subject to all the rules and regulations associated with the ethical rules of a law firm operating in the State of Arizona. These rules are found in Section 7-209 of the Code of Judicial Administration and the Arizona Supreme Court Rules. Together the rules address issues relating to (i) conflict of interest situations for client representation, (ii) issues relating to the sale of a law practice, (iii) law firm owner responsibilities such as for having sufficient managerial authority, effective internal policies and procedures, and procedures for the conformity of law employees to the rules of professional conduct and procedures for non-law employees, and (iv) adequate trust account requirements, including the annual certification requirement. The rules also address code of conduct issues such as lawyer independence in the provision of services, the diligent and promptness of rendering legal services, and record maintenance, among others. An ABS and its law employees will be subject to the disciplinary rules 46 et. seq. of the Arizona Supreme Court.

Because the only other state that permits an ABS like ownership is Colorado, which is a more limited authorization than afforded by Arizona, PatentVest will not be able to expand its Arizona ABS into other states. The focus of the PatentVest ABS, however, is on patent issues and patent prosecution which is largely a federal practice, therefore the restriction of its practice to the State of Arizona is not seen as a limitation on its operations. Where it has clients that seek legal representation outside of the State of Arizona, the PatentVest ABS will make referrals to firms licensed in appropriate jurisdictions.

U.S. Foreign Corrupt Practices Act

The U.S. Foreign Corrupt Practices Act, or FCPA, prohibits U.S. corporations and individuals from engaging in certain activities to obtain or retain business abroad or to influence a person working in an official capacity. It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Equivalent laws have been adopted in other foreign countries that impose similar obligations.

Human Capital

As of the date of this prospectus, MDB and through MDB Management and Invizyne employs 30 people on a full-time basis. We also engage from time-to-time consultants for various activities.

MDB Management has an agreement with MDB Capital S.A., an affiliated Nicaraguan company, to provide services to the Company on an out-source, as required service basis. The services are provided on a specific request, within an identified scope of activity, from time to time. Primarily the services will be administrative support services, research activities, and analytical services as necessitated by the holding company, Public Ventures, PatentVest and partner companies.

As our business develops, we establish partner companies and we enhance our operations, we anticipate the number of employees and consultants will grow. In addition, we also anticipate adding human capital contractors, consultants, clinical research organizations and collaborative businesses to perform clinical studies, toxicology assessment, manufacturing, regulatory, and other operational functions.

Properties

Our current executive offices and the offices of Public Ventures, MDB Management, and PatentVest are located at 14135 Midway Road, Suite G-150, Addison, TX 75001. We rent 5,525 square feet of office space, under a lease for a period of 91 months, starting December 1, 2022. The initial base rent is $150,666 per year, after 7 months of free rent. The lease provides for annual increases.

Invizyne’s current executive offices, laboratory space, and pilot production are presently located in a 5,098 square foot facility in Monrovia, California. The rental amount is $14,020 per month/$168,240 per year, under a 5-year lease term increasing at 2.5% per annum. Invizyne has the option under its lease to increase the number of square feet it rents in the same facility, which it plans on exercising in the future.

Legal Matters

We are not currently subject to any material legal proceedings. However, we may from time to time become a party to various legal proceedings arising in the ordinary course of our business.

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MANAGEMENT

Set forth below are our directors and officers:

Name	Age	Position
Christopher Marlett	58	Chief Executive Officer, Chairman of Board and Director
Anthony DiGiandomenico	55	Chief of Transactions, and Director
George Brandon	63	President, and Director
Mo Hayat	48	Chief of Entrepreneurship & Operations, and Director
Jeremy James	45	Chief Accounting Officer
Javier Chamorro	46	Director
Susanne Meline	55	Director
Mathew Hayden	51	Director
Sean Magennis	58	Director

Christopher Marlett. Christopher Marlett has been the chief executive officer and chairman of the board of directors and a director of the Company since inception on August 10, 2021. Mr. Marlett has been since 1997, the Chief Executive Officer and a co-founder of Public Ventures (formerly known as MDB Capital Group, LLC). Over his 36 years of working in the securities industry, he has led multiple financings for venture stage public companies and has dedicated his efforts to optimizing this method to launch promising technology/business platforms. He has been integral in co-founding and developing the commercialization and financing strategy for all the companies MDB has taken public. In addition, he has served as a board member of several of the public companies in the early stages. He has invested significant efforts in developing a human capital development platform in Nicaragua that has led to the creation of the largest call center park in the country employing approximately 3,000 people and several knowledge process outsourcing operations to support MDB’s businesses. He developed the first patent services company in Nicaragua that was sold to Murgitroyd an LSE-listed patent attorney and services platform. He is the co-founder of PatentVest and developed the platform from inception in 2003. He holds a Bachelor of Science degree in Business Administration from the University of Southern California. Mr. Marlett’s leadership and financial experience position him well to serve as a member of our board of directors.

Anthony DiGiandomenico. Anthony DiGiandomenico has been the Chief of Transactions and director since the inception of the Company on August 10. 2021. He has also served on the board of directors of ENDRA Life Sciences Inc. (Nasdaq: NDRA), a developer of enhanced ultrasound technology, from July 2013 until present, the board of directors of Provention Bio, Inc., a developer of multiple drug therapies, from January 2017 until May 2020 and the board of directors of Cue Biopharma, Inc., that develops novel biologic drugs for the selective modulation of the human immune system to treat a broad range of cancers and autoimmune disorders from January 2016 to October 2019. Since he co-founded Public Ventures (formerly known as MDB Capital Group, LLC) in 1997, Mr. DiGiandomenico has been enabling investment into early-stage disruptive technologies. He has worked alongside a wide range of companies in biotechnology, medical devices, high technology, and renewable energy spaces. Mr. DiGiandomenico holds an MBA from the Haas School of Business at the University of California, Berkeley and a BS in Finance from the University of Colorado. Mr. DiGiandomenico’ s financial expertise, general business acumen and significant executive leadership experience position him well to make valuable contributions to our board of directors.

George Brandon. George Brandon has served as President of the Company since its inception on August 10, 2021, and as a director of the Company since January 14, 2022. Mr. Brandon’s 36 years of varied investment experience has included the last 12 years with Public Ventures (formerly known as MDB Capital Group, LLC). Mr. Brandon’s business focus has primarily been marketing & strategy development and community building in and around entrepreneurial start-ups, micro-cap, and small-cap companies. Prior to joining MDB, he served as a partner of Trinity River Advisors, LLC, a turnaround consulting firm targeting small companies dealing with financial distress. He received his education at Concordia University in Irvine, CA.

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Mohammad “Mo” Hayat. Mo Hayat has served as Chief of Entrepreneurship & Operations of the Company since its inception on August 10, 2021, and a director of the Company since January 14, 2022. Mr. Hayat has also served as the Chief Executive Officer of Invizyne Technologies Inc. since its inception in April 2019, and, effective as of August 2022, transitioned to the role of Executive Chairman and President of Invizyne Technologies Inc. Mr. Hayat founded and has operated Mora Partners Inc., a consulting and investment firm since September 2006. Notable prior experiences for Mr. Hayat include serving as an Associate at Latham and Watkins from 2001 to 2006, as Partner at Raines Law Group from 2006 to 2009, as EVP of Business Development at Fulham Company Ltd from 2009 to 2015, and as Associate General Counsel Corporate, M&A, and Venture Capital at Hewlett Packard Enterprise from 2015 to 2017. Mr. Hayat also served on the board of directors of Fulham Company Ltd. from January 2019 to August 2022. Mr. Hayat brings extensive domestic and international experience, having led business and legal operations for public and private companies - both large and of the startup variety - with a demonstrated track record of success. Experienced in leading executive teams during times of growth and through all life cycles of companies, Mr. Hayat is a key leader in M&A, IP, JVs, real estate, strategy development, IPO, VC, PE, transactional, and business development matters. Mr. Hayat is passionate about team building, developing talent and “thinking outside the box”. Mr. Hayat received his Juris Doctorate in 2001 from UC Berkeley School of Law and a Bachelor of Science in Biological Chemistry in 1997 from Pepperdine University.

Jeremy James. Jeremy James has been the Chief Accounting Officer of the Company since June 27, 2022. From December 2020 to June 2022, Mr. James served as Vice President/Controller of Cottonwood Financial. From November 2016 to September 2020, Mr. James served as the Director of Revenue of Orthofix. From January 2012 to November 2016, Mr. James served as a Senior Manager in the consulting practice of Ernst and Young. From May 1999 to January 2012, Mr. James served a Manager with CBIZ/Mayer Hoffman McCann, an audit and tax firm. Mr. James received a Bachelor of Science degree in Accounting from Azusa Pacific University. Mr. James is a Certified Public Accountant licensed in the states of Texas and California.

Javier Chamorro. Javier Chamorro has served as a director of the Company since January 14, 2022. Mr. Chamorro has served as CEO of MDB Capital S.A, a Nicaraguan entity performing contractual services to MDB’s various subsidiaries since July 2022. He has also been the Managing Partner at Meca Consulting, a company based in Nicaragua and dedicated to providing Investment Consulting and Investment Banking services in Latin America from March 2017 until the present. Mr. Chamorro led the Nicaraguan investment attraction agency, PRONicaragua, during his role as Executive Director from 2007 to 2017. During this period, he also held the position of Director for Central America and the Caribbean at the World Association of Investment Promotion Agencies (WAIPA) and coordinated a collaboration effort between the Investment Promotion Agencies of Central America. Previously, he served in different regional and transnational companies, including positions as Commercial Director for OCAL in Nicaragua, a leading consumer goods distributer in the country, Country Manager at Kellogg’s Central America, and Category Manager at Central American Retail Holding (currently, Walmart Central America). Throughout his career, he has advised companies in energy, mining, agriculture, and outsourcing activities. He currently maintains investments in some companies in these sectors. Mr. Chamorro studied Business Administration courses at American University in Managua and has taken Regional Economic Development courses at INCAE. He is a fellow of the Central American Leadership Initiative (CALI) program (part of the Aspen Institute global network of programs); a member of the board of directors of Operation Smile Nicaragua, and leads the Nicaraguan Gymnastic Federation elite training program.

Susanne L. Meline. Susanne L. Meline has served as a director of the Company since May 2, 2022. Susanne Meline is a special situations analyst at Francis Capital Management, LLC, where she has worked since 2003. She is also an arbitrator for FINRA Dispute Resolution Services and has served on a number of boards of directors, including Finomial Corporation from October 2017 – July 2019, AquaMetals Corporation from July 2019 – April 2020, Planned Protection Insurance Co. Ltd. from June 2022 to present, Ra Medical Corporation from February 2021 to the present, and ClearSign Technologies Corporation from May 2018 to the present. Susanne has a Juris Doctor degree from UC Hastings College of the Law and a Bachelor of Arts degree in Political Science from UCLA.

Matthew “Matt” Hayden. Matt Hayden has served as a director of the Company since May 2, 2022. Mr. Hayden has managed his family office since January 2018 which invests in both private and public companies. Mr. Hayden founded and managed Hayden Communications, Inc, an investor relations firm in 1998 which was sold in 2006. In 2006, he founded Hayden Communications International, Inc. which sold a 51% stake to MZ Group in 2011. Mr. Hayden then served as Chairman and advisor of MZ Group through December 2019. Since January 2022, Mr. Hayden has also served as a member of the GP for Surfworks, which builds and operates Wave Garden Surf Facility Projects in the United States. He earned a B.S. in Finance from the University of South Carolina.

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Sean Magennis. Sean Magennis has served as a director of the Company since May 2, 2022. Mr. Magennis has served as President of CEO Coaching International, a global CEO coaching business, since November 2021. Previously, Mr. Magennis served as CEO and Chairman of Capital 54, a family office, from July 2020 to November 2021, as Global President and COO of YPO, a global community of chief executives, from May 2013 to July 2020, as Member of Gateway Green Energy Holdings, LLC, an operator power plants and energy assets, from 2009 to present, as President of Meximae Financiera Corporation, a real estate developer in Mexico, from January 2003 to August 2008, as President of Thomas International Management Systems from 1991 to 2003, as President of Thomas International, A Caldwell Interest, from 1992 to 1996, and Global President, Board Member and Chapter Chairman of Entrepreneurs Organization from 1991 to 2007. Mr. Magennis is a decisive and proactive business builder with extensive growth, acquisition, turnaround, and international experience. He is adept at developing high performing teams who deliver results through collaboration. He combines vision with positive pragmatism to transform strategies into actionable, measurable opportunities utilizing strong analytical and problem-solving skills.

Board Composition/Committees

Our board of directors currently consists of eight persons. Under our operating agreement the board of directors may establish the number of persons serving on the board of directors from time to time by resolution, up to a maximum of 12 persons. Four of our directors, Javier Chamorro, Susanne Meline, Matthew Hayden, and Sean Magennis are independent within the meaning of Nasdaq’s rules. Susanne Meline is a “financial expert” as that term is defined in SEC regulations.

Because our class B common shares are held by two persons and represents more than 50% voting control of MDB, we are a “controlled company” under the listing rules of Nasdaq. As a controlled company, we will be exempt from many of the corporate governance obligations that other companies must follow when listed on Nasdaq. Management intends to take advantage of these exemptions. As such, we will be exempt from the certain of the corporate governance rules under the Rule 5600 Series, as follows: (i) having a board comprised of a majority of independent directors (Rule 5605(b)), iii) having a compensation committee (Rule 5605(d)), and (iii) having a director nominations committee (Rule 5605(e)). Additionally, we will not be required to hold annual meetings. Notwithstanding these exemptions, we will have an audit committee comprised solely of independent directors, which among other things will review related party transactions. Also, notwithstanding the exemptions, class A common shareholder approval will be required for stock option or purchase plans, and our financial statements must be audited by an independent public accountant that is registered with the PCAOB.

Board Diversity

Each year the board of directors, will review the appropriate characteristics, skills, and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates, we will consider factors including, without limitation, an individual’s character, integrity, judgment, potential conflicts of interest, other commitments, and diversity. While we have no formal policy regarding board diversity for our board of directors as a whole nor for each individual member, our board of directors will consider such factors as gender, race, ethnicity and experience, area of expertise, as well as other individual attributes that contribute to the total diversity of viewpoints and experience represented on the board of directors.

The following is a table indicating the current board diversity.

Board Diversity Matrix (As of March 15, 2023)

Total Number of Directors	-
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	1	7	-	-
Part II: Demographic Background
African American or Black	-	-	-	-
Alaskan Native or Native American	-	-	-	-
Asian	-	1	-	-
Hispanic or Latinx	-	2	-	-
Native Hawaiian or Pacific Islander	-	-	-	-
White	1	3	-	-
Two or More Races or Ethnicities	-	1	-	-
LGBTQ+	-	-	-	-
Did Not Disclose Demographic Background	-	-	-	-

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Audit Committee.

We have established an audit committee. The audit committee will be responsible for, among other things: (i) retaining and overseeing our independent accountants; (ii) assisting the board of directors in its oversight of the integrity of our financial statements, the qualifications, independence and performance of our independent auditors; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing with our chief executive officer and chief financial officer (or chief accounting officer, as the case may be) and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee’s performance and the adequacy of its charter. The audit committee will also review and approve all transactions with affiliated parties. Our board of directors has adopted a written charter for the audit committee, which is available on our website.

The members of the Audit Committee are Susanne Meline, Matt Hayden and Sean Magennis, each of whom satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Rule5605(c)(2) of the Nasdaq Marketplace Rules. Ms. Meline serves as the chairwoman of the audit committee. Ms. Meline is a “financial expert” as that term is defined in SEC regulations.

Board’s Role in Risk Oversight

Our board of directors is primarily responsible for overseeing our risk management processes. Our board of directors, as a whole, determines our appropriate level of risk, assesses the specific risks that we face, and reviews management’s strategies for adequately mitigating and managing the identified risks. Although our board of directors administers this risk management oversight function, one or more committees of our board of directors may support our board of directors in discharging its obligations. For example, the audit committee reviews our major financial risk exposures and the steps management has taken to monitor and control such exposures and it will reviews matters relating to legal compliance that have a material effect on the Company financial statements and certain other limited areas of governance and will report to our board of directors regarding such matters.

Code of Business Conduct and Ethics

Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors. The full text of our code of business conduct and ethics will be posted on the Investor Relations section of our website. The reference to our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus. We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of these provisions, on our website or in public filings.

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Compensation of Members of Board of Directors

We do not intend to pay persons serving on the board of directors who are also paid a salary by MDB, any of the subsidiaries or any of the partner companies. To the extent that we have any independent directors, the board of directors will determine their compensation at the time of their appointment and thereafter.

We do not have any defined compensation plans for our officers or directors. We may adopt one or more forms of compensation arrangements, including cash and stock-based compensation arrangements in the future. Any stock-based compensation plans will be subject to the approval of the holders of the class A common shares as required by the listing rules of Nasdaq and any other applicable laws.

We also will reimburse any persons that are independent members of our board of directors for their reasonable expenses incurred in connection with attending meetings of our board of directors, committee meetings and other activities they undertake on our behalf and on behalf of our subsidiaries and partner companies.

Limitation of Liability of Directors and Indemnification of Directors and Officers

MDB provides indemnification to each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer or is or was serving at the request of MDB as a director or officer of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans against all expenses, liability, and loss. The board may authorize the advance of expenses in connection with any proceeding where the person is entitled to indemnification. MDB may purchase and maintain insurance to protect itself and any director, officer, employee or other agent against any expense, whether or not MDB would have the power to indemnify the person.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Indemnification Agreements

We enter into indemnification agreements with each of the persons serving on the board of directors and executive officers of MDB. The indemnification agreements provide for indemnification against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee in connection with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations. The indemnification agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment or other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee is ultimately found not to be entitled to indemnification by us. The indemnification agreement sets forth procedures for making and responding to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between us and an indemnitee arising under the indemnification agreements.

We also arrange that there are indemnification agreements between our partner companies and their officers and directors. These indemnification agreements provide for indemnification against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee in connection with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations. The indemnification agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment or other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee is ultimately found not to be entitled to indemnification by us. The indemnification agreement form sets forth procedures for making and responding to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between us and an indemnitee arising under the indemnification agreements.

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EXECUTIVE COMPENSATION

This section provides an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive officer and our next two most highly compensated executive officers in respect of their service to our company during the years ended December 31, 2021, and 2022. The amounts indicated for the year ending December 31, 2022, do not include any amounts that may be awarded as bonus compensation. We refer to these individuals as our named executive officers. The compensation information disclosed herein for our three named executive officers is disclosed in accordance with SEC requirements; such disclosure does not include the compensation for our other executive officers. Our named executive officers for the year ended December 31, 2022 and 2021 respectively, are:

Name and Principal Position Year Salary Bonus Shares Options Awards Nonequity Incentive Plan Compensation Nonqualified Deferred  Compensation Earnings All Other Compensation Total