MDB Capital Holdings (MDBH) risk factors, 2026 10-K

Risks Relating to Holding Company Taxation

1. 01The Class A Common Shares are securities issued by a limited liability company and represent limited liability interests
2. 02You may be subject to state, local and other taxes, depending on your own particular circumstances
3. 03Allocations of income and loss may be re-determined by the IRS
4. 04MDB may provide delayed final Schedules K-1
5. 05If we are treated as a corporation for U.S. federal income tax purposes, the value of the shares could be materially adversely affected
6. 06Complying 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
7. 07Shareholders may be subject to restrictions on deductibility of expenses and other losses25% rewritten
8. 08Future legislative or regulatory action could significantly change the tax aspects of an investment in our shares

Risks Relating to Our General Business Operations

1. 09Although 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
2. 10We might require additional capital to support operations and business growth and to fund our partner companies; this capital might not be available on terms favorable to us, or all, when needed
3. 11Our 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
4. 12Our business model does not rely upon the receipt of operating cash flows from our partner companies
5. 13Our success depends, in part, on the successful development of our partner companies
6. 14Our partner companies are expected to be early-stage development companies, which will make it difficult to judge and evaluate their businesses and their future success71% rewritten
7. 15One of our subsidiaries, Public Ventures, is subject to Securities and Exchange Commission and FINRA regulation, DTC participant requirements, and settlement bank agreements, and, if not compliant with those regulations, may be subject to fines, limitations on activity and financial impairment
8. 16Our 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
9. 17We 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
10. 18Our 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, cash flows and financial condition
11. 19Potential Adverse Impact of U.S. and Nicaraguan Political and Regulatory Environments on Our Operations
12. 20We out-source aspects of our business operations in Nicaragua

Risks related to our significant and concentrated equity investment in eXoZymes

1. 21The Company’s equity investment in eXoZymes represents a significant portion of our total assets and is reported as an equity method investment on our balance sheet. As such, fluctuations in the value of this investment may have a material impact on our financial position and the results of operations
2. 22Given the size and concentration of our investment in eXoZymes, any material change in its value—positive or negative—will directly affect our financial statements, potentially causing significant variability in our reported earnings and equity
3. 23There may be securities market risks resulting from owning the equity securities of our partner companies
4. 24We 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 invest at a higher valuation, thus increasing our risk of loss and reducing potential future gains
5. 25We may be limited in our ability to attract and continue to employ personnel engaged by our partner companies
6. 26There is significant competition for the time and capital of our community members and they have no obligation to continue to own MDB member interests, or participate in the development of the partner companies as envisioned by our business model
7. 27Impact of Ukrainian and Israeli Conflict84% rewritten
8. 28Impact of the Iran ConflictNew
9. 29Cyberattacks 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
10. 30Based 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
11. 31Some of our partner companies may be unable to protect their proprietary rights and may infringe on the proprietary rights of others
12. 32Where 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
13. 33Our partner companies have limited foreign intellectual property rights and may not be able to protect their intellectual property rights throughout the world
14. 34Our 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
15. 35Patent terms may be inadequate to protect a competitive position for an adequate amount of time
16. 36Our efforts to maintain and protect our intellectual property rights through means in addition to registration may not be sufficient to protect our business
17. 37If 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
18. 38(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

Risks Related to M1

1. 39M1 has a limited operating history on which to evaluate its ability to achieve its operating objectives
2. 40M1 may not be successful in its efforts to advance from the pre-clinical development stage and to fully develop a small molecule senescence platform

Risks Related to PatentVest

1. 41If 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
2. 42If 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
3. 43PatentVest 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
4. 44PatentVest 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
5. 45We 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

Risks related to Public Ventures

1. 46Public Ventures conducts offerings where we will act as a placement agent or an underwriter, and thus we are subject to underwriter and similar liability
2. 47Public Ventures self-clearing capabilities facilitate its operations49% rewritten
3. 48As a broker-dealer, Public Ventures will have to expend considerable resources on maintaining adequate compliance practices. The failure to be in regulatory compliance may result in fines, sanctions and the possible curtailment of operations
4. 49We may be exposed to more cybersecurity threats as we expand our business
5. 50The 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
6. 51Public Ventures will have to maintain adequate capitalization levels to conduct its broker-dealer and clearing businesses
7. 52Settlement bank services are difficult to arrange, without which Public Ventures will not be able to operate a clearing business
8. 53Hiring and organizing personnel for the clearing operations

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

1. 54Control by management may limit your ability to influence the outcome of director elections and other transactions requiring shareholder approval
2. 55The 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
3. 56The dual class structure of our currently issued equity securities may adversely affect the trading market for our Class A Common Shares
4. 57The existence of our registered broker-dealer subsidiary may delay or prevent takeover attempts of our Company
5. 58Our capital structure may have anti-takeover effect
6. 59The 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
7. 60We may make distributions of the securities of our partner companies, including cash and rights to purchase equity of a partner companies
8. 61We incur costs as a result of operating as a public company, and our board of directors is required to devote substantial time to oversight of compliance requirements and corporate governance practices
9. 62We do not have key-man insurance
10. 63The 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
11. 64The United States stock markets recently have experienced price and volume fluctuations due to many factors, including federal government policies, inflationary pressures, changing interest rates, and the conflicts in Ukraine and Iran