Exozymes Inc.: Form 10-K for the period ended Dec 31, 2025

Overview

Chemicals are ubiquitous in modern life - they form the basis of medicines, fuels, plastics, food, and colors, among many other applications that together contribute to our ability to live “the good life” in the modern world.

Harvesting chemicals from nature via traditional extraction methods is often inefficient and often requires large amounts of biological material to extract the necessary amounts of the desired chemical compounds. So, despite maybe being sustainable, it is not enough to supply the world’s demand through natural extraction, and it is not as scalable, as cost effective, or as flexible as using petrochemicals from a manufacturing point of view.

Since the discovery of oil and the advance of petrochemistry, the world has used petrochemical production methods to produce many desired chemicals—but petrochemical production is often toxic and environmentally damaging and, therefore, unsustainable. Furthermore, there is a limitation to what kinds of chemical compounds petrochemistry can efficiently produce, as nature is simply much more diverse and complex.

As a best-of-both-worlds solution for future chemical production, eXoZymes believes it has developed technology that will allow us to harness more of the mechanisms that nature uses for biochemical production. We believe the technology we are developing will allow for a future where we can build new biosolutions that harness nature’s diversity but are designable and engineerable and, therefore, as scalable as petrochemical, all while being sustainable.

This introduces a paradigm shift in chemical production through the groundbreaking and sustainable production of highly valuable new chemicals (e.g., small molecules), such as active compounds in pharmaceutical drugs, new generations of nutraceuticals, or the core energy-molecules in biofuels. Just to mention a few of the at least 100s of potential application areas.

All of the aforementioned examples represent very large potential business opportunities. Focusing our efforts will be key. And we will therefore concentrate our efforts in the pharmaceutical and nutraceutical space to begin with, as our core technology is a good fit for these markets, where we can make highly valuable compounds (e.g. natural products or natural-product-inspired compounds) and productize them, and that way scale up the business without taking on too much.

We believe, that with time, a paradigm shift in how humans get access to chemicals is possible by leveraging AI-designed and highly engineered enzymes (called exozymes), allowing for a new generation of “cell-free” biosolutions. When cell-free exozyme biosolutions are compared to synthetic biology (SynBio), which has offered a similar kind of vision for the future, but mostly failed, the main difference is that while many of the synthetic biology technology problems relate to scaling up production to commercially relevant scales using living cells, exozyme biosolutions avoids many of the scaling challenges by liberating the enzyme based chemical-production-pathways from the cell. Living cells, simply put, are difficult to scale and do not want to produce chemicals in industrially relevant amounts that they do not need or benefit from themselves.

In response to feedback from stakeholders and the ongoing need to clarify the specific type of “cell-free” technology utilized by the company, a rebranding effort was undertaken in February of 2025 to provide greater clarity around the core technology and to distinguish it from existing approaches. Because we consider our technology as so foundational, differentiated, and full of potential, we believe existing terminology was insufficient to accurately describe it. As a result, the term “exozymes” was introduced — not only as a rebranding effort, but also as the definition of this new scientific and technology concept. As such, Invizyne Technologies, Inc. was rebranded to eXoZymes, Inc.

Biomanufacturing using exozymes and exozyme biosolutions, we believe, can efficiently convert affordable and widely available, potentially low-cost feedstocks into a broad spectrum of chemicals. The capability to develop and bio-manufacture specific compounds that can be deployed in nutraceutical and pharmaceutical markets, as well as isobutanol for use in Sustainable Aviation Fuel, has already been successfully demonstrated by eXoZymes through multiple publications, use cases, and non-public and public pilot projects with potential partners.

What are exozymes?

Exozymes are advanced enzymes engineered with the aid of artificial intelligence to function in bioreactors outside of living cells. These exozyme-based systems, called biosolutions (e.g. exozyme biosolutions), have the potential to efficiently convert affordable and abundant feedstocks into a wide array of valuable chemicals, including small-molecules used as e.g. active pharmaceutical ingredients (APIs), nutraceuticals, and biofuels to list a few examples.

The team at eXoZymes has over a decade of expertise in enzyme engineering, optimization and the design of multi-step exozyme biosolutions. In our approach we have integrated artificial intelligence, bioengineering, and biochemical pathway engineering, using feedback loops that utilize our ability to generate high-quality data within a state-of-the-art laboratory setting that allows us to design, test, scale and make biosolutions for commercial use. Drawing inspiration from the scientific breakthroughs recognized by four recent Nobel Prizes in Chemistry, combined with our proprietary development, IP and trade secrets, the technological platform and developments behind these state-of-the-art biosolutions represents a new frontier - the next generation of biomanufacturing.

By utilizing exozymes rather than traditional methods or enzymes, it also potentially becomes significantly easier to design, engineer, and implement an exozyme biosolution pathway to produce new compounds with enhanced or tailored properties.

Research and Development Grants

eXoZymes, Inc. has received US government grants, primarily from the Department of Energy (DOE) for work related to isobutanol, upgrading alcohols, and cofactor development, as well as grants from the National Institutes of Health (NIH), for work relating to cannabinoids. This funding has allowed us to advance our technology, conduct research, help validate our processes, and advance the boundaries of scientific and technological advancement in our field.

eXoZymes, Inc. has also received grants from two non-government sources. One of the grants was from the Gates Foundation for work on terpene synthesis. Terpenes are a class of natural products that display myriad properties and are used as flavors and fragrances but also make of the core of numerous pharmaceuticals. The grant amount was $50,000, and the work was completed at about the time of founding eXoZymes. The second grant was from Shell GCxN, received in 2023, which is under the Shell Game Changer Award program. The grant was used for our work on isobutanol production.

From inception through December 31, 2025, the Company has received grants totaling $17,697,378, of which $4,058,367 was awarded in 2025 and $1,048,302 was awarded in 2024. In the past, both government funding and private funding have been important sources of funds for the operations of eXoZymes. There is no assurance that we will continue to be able to draw on any outstanding US government grants, private grants or be able to obtain new grants. However, we believe that the Company now has a great base for a business and a first version of a technology platform, which is not dependent on grants, that can allow us to create additional value. In the future we also will try to leverage grants as additional sources of financial resources. If we are not able to obtain any new government and other grant funding after the funding we have already been granted runs out, we may have to limit our operations or may have to raise additional capital from other sources to maintain or further develop projects and capabilities at eXoZymes.

Commercialization Strategy and Focus

As already described, we believe the potential applications of our technology are extensive. We are currently focusing on low-volume, high-value compounds that will often be natural products or their derivatives. These are being developed to be used as the active ingredients in nutraceuticals, and preferably, those that also have the potential to become active pharmaceutical ingredients (API).

We believe nutraceutical use-cases offer faster time to market with less cost and complexity (e.g. regulatory work). Pharmaceutical use cases often require higher end-product purity, longer regulatory timelines, and/or additional engineering to produce specialized derivative-versions of compounds that have optimized pharmaceutical qualities; therefore they typically have a much higher upside potential but they take more time and higher costs to fully develop. The good news is that most of the work to develop exozyme biosolutions for production of nutraceuticals will be reusable and can serve as the foundation for the pharmaceutical business case. Therefore, focusing on developing nutraceuticals with potential as pharmaceuticals represents a risk-minimizing strategy and double-dip opportunity that amplifies the chance for positive outcomes and returns of investments.

In rare application cases, we may work on projects outside of the “nutraceutical-with-pharmaceutical-potential” focus in the 2026-2027 timeframe. We define these other potential projects as those projects with “extraordinary business opportunities,” The only example at this time is our isobutanol program. In the case of isobutanol, the US government via the Department of Energy, has granted us non-dilutive resources to build an exozyme biosolution to produce isobutanol that can e.g. be used for Sustainable Aviation Fuel (SAF) and other sustainable biofuels and industrial chemical applications, where we get to keep almost all of the upside (IP, new technology and the business opportunities).

Other potential “extraordinary business opportunities” may be found via sponsorships and grants or if and when other companies have already heavily invested into a market such that a market is established and accessible once a working biosolution has been developed and is ready for deployment. In some cases, we anticipate that other companies will have struggled to achieve market relevant economics using a Synthetic Biology (SynBio) or synthetic chemistry approach and have already primed the market for adoption without a viable solution to provide product. Because it is possible that an exozyme biosolution can be built much faster and cheaper than the SynBio approach, there might be customers willing to make a deal with us such that sufficient upside (e.g. project cost, IP rights, licensing, royalties) provides overwhelming motivation to pursue the opportunity, despite the target compound or market not being a part of our current focus.

The 2026–2027 period represents an initial commercialization and validation phase focused on compounds that can be positioned as nutraceutical products while demonstrating characteristics that support potential pharmaceutical development.

This staged approach allows the company to:

• Accelerate time to market through nutraceutical regulatory pathways
• Generate early revenue streams and market adoption data
• Validate biological activity and consumer demand
• Establish a foundation for potential future pharmaceutical indications

Following this defined focus period, the company may evaluate transitioning select compounds into formal pharmaceutical development programs or expanding the product portfolio into broader therapeutic applications.

After the initial 2026-2027 “nutraceutical-with-pharmaceutical-potential” focus period, we plan to reevaluate our focus and possibly expand our focus areas if we find it beneficial to do so. Regardless of the specific application market, we anticipate that partnerships will be essential. In markets where eXoZymes can bring a competitive advantage (better product or feature, cheaper prices, significantly “greener”, lower setup cost etc.) due to our state-of-the-art (bio)manufacturing biosolutions and a partner has established a viable commercial roadmap (such as a customer base, distribution networks, and market insights) a partnership will be optimal. Because we believe eXoZymes is fundamentally a platform company, collaboration with partners who possess deep knowledge and experience within specific markets and product domains can further benefit the platform by quickly expanding our products and applications.

Because eXoZymes is a young company and the technology is so foundational, there are neither enough people nor capital currently available to pursue all potential markets independently. Therefore, we believe that without strong partnerships, the full promise of exozyme biosolutions would remain unrealized in our generation.

Traditional production of fuels and chemicals has predominantly relied on two or three primary technologies; natural resource extraction, chemical synthesis, and more recently, synthetic biology (SynBio). Each method carries potential benefits but also significant drawbacks and notable limitations.

Natural Extraction: Many beneficial chemicals used by humans, such as vegetable oils, ethanol, perfumes, and pharmaceuticals, originate from biological organisms (e.g. plants, microbes, etc.). While these molecules can often be extracted from natural sources, many potentially useful chemicals are found in limited amounts in relation to the biomass in which they are located (e.g. at very low concentrations). Whether the natural source is enough to satisfy commercial demand depends heavily on factors like crop yields, market demands, and geopolitical factors. Natural extraction is generally characterized as inefficient, especially when the desired molecule is only found in trace amounts in a plant or other organism. Processes that depend on natural extraction can require large amounts of energy and be very costly. Often, environmentally damaging solvents are used in the extraction process. When traditional methods of natural extraction are used, the method typically generates substantial amounts of waste product, which present issues of local pollution and waste management. An additional limitation of natural extraction is an issue of the purity of the end-product, and in many instances the purification process will damage or destroy the molecule being sought, or contaminants cannot be sufficiently removed. Achieving consistent quantity and quality are issues inherent to natural extraction. Using natural resources, such as plants, can also result in over harvesting with consequences to biodiversity, damaging land resources with negative impact on local income and related societal issues.

Chemical Synthesis: To circumvent the limitations of natural extraction, chemists have developed sophisticated methods for building molecules from simple petrochemical building blocks. Chemical synthesis is one of the most common methods of producing new molecules, and the chemical industry infrastructure is well-established globally. One of the major advantages of chemical synthesis is that it is highly scalable. However, traditional chemical production methods often suffer from substantive drawbacks such as high energy consumption, extraordinary and potentially dangerous operating conditions such as high temperatures or pressures, use of large volumes of toxic solvents (resulting in toxic waste), use of imprecise catalysts resulting in inefficient reactions, requiring extensive purification and associated costs, and each step in the synthesis usually requires different reaction conditions, making the process cumbersome and expensive which is often a factor in determining the viability of an end-product. Generally, petrochemical processes are also usually environmentally unfriendly. In addition, side products and impurities can be difficult to separate from the desired molecule; although some by-products are tolerated if they have their own commercial viability. Chemical synthesis also may have long and complex production cycles and can require enormous CAPEX investments, although this can sometimes be mitigated by the scales which petrochemical processes are deployed at.

Synthetic Biology (SynBio)/Metabolic Engineering of Cells: To provide alternatives to chemical synthesis and natural extraction, significant efforts have been made to engineer biological organisms to be able to convert simple biomass feedstocks into valuable chemicals. Synthetic biology (SynBio) seeks to reprogram an organism, such as yeast or bacteria, using genetic engineering and/or recombinant DNA to produce the desired molecule end-product. The SynBio approach has some benefits over the other two methods mentioned above, but it has been more difficult than originally thought to realize economic production of end-products at scale in a timely fashion and at a reasonable cost. So far, achieving commercially viable production of small-molecule natural products using SynBio has been challenging, and most projects and companies trying to use SynBio for biomanufacturing have gone out of business. The failure of SynBio approaches can be a combination of many issues, including difficulty in keeping the host microbe alive, especially if the desired end chemical product or intermediate chemicals are toxic to the cell, and competing metabolism where other internal processes either compete for the starting material or the cannibalization of the product molecule for the cell’s own needs. These complications result in long and uncertain development cycles, low yields, high costs, and high failure rates. Overall, SynBio’s economic viability remains challenging, with the cost structures being influenced by research, development, scale-up challenges, and expensive manufacturing. The collapse of SynBio industry stalwarts like Zymergen, Demetrix, and Amyris is exemplary of these risks.

Our Solution

We believe eXoZymes biomanufacturing platform is a distinct and more effective path to environmentally and commercially sustainable biomanufacturing compared to existing methods. Our approach avoids the complexity of engineering virtually uncontrollable living cells that historically have plagued SynBio efforts. Since living cell’s do not benefit from being used as “chemical factories”, they will fight back as if their lives depend on it. Rather than trying to engineer the enzyme pathways in the context of a living cell to produce a desired chemical, we remove cells from the equation by reconstituting stabilized enzymes (e.g. exozymes) cell-free. As a result, our cell-free approach has the potential to produce small molecule natural products efficiently and cost-effectively with enhanced control and shorter timelines. To produce small molecule natural products efficiently, we isolate the desired enzyme catalysts produced at high levels in industrial microbial hosts such as E.coli (bacteria) or P. pastoris (yeast), and then place the desired mix of enzymes in a bioreactor along with the feedstock (the basic raw material for the desired product), cofactors (a substance, other than the substrate, whose presence is essential for the activity of an enzyme) and other proprietary elements required to make the desired product. The result is a biosolution that can be used to biomanufacture chemicals of interest, without the complications of living cells, while still having all the advantages of biology that drove the vision of SynBio.

We believe that using exozymes overcomes the scalability challenges that have historically limited commercial viability in the synthetic biology (SynBio) sector. By removing enzyme-catalyzed chemical reactions from the constraints of cellular environments, much higher titers, yields, productivities, and purity can be achieved. As such, eXoZymes views our technology, IP platform and partnership offerings as the logical successor to SynBio, both in the short term for addressing nutraceutical markets with potential to access pharmaceutical markets, and in the long term for larger commodity and specialty markets that use chemicals, but where depleting natural resources and/or pollution due to petrochemical processes makes their production challenging.

Further highlighting the potential benefits of our platform solution, a large number of identified enzymes and enzymatic pathways have the potential to become an exozyme biosolution to produce natural products (small-molecule chemicals) when combined with our expertise in enzyme engineering and exozyme pathway design. Moreover, eXoZymes’ platform offers potential access to chemicals and conversions that might be difficult or practically impossible to develop and manufacture using traditional SynBio or chemistry approaches.

We believe eXoZymes’s technology has the potential to overcome the inherent limitations and bottlenecks of currently used legacy technologies such as SynBio and chemistry. We think exozymes can enable the building of complex enzymatic pathways outside of cells that may operate with exceptional efficiency for long periods of time, thereby producing sizable quantities of the desired product at high purity, at a manageable cost.

We believe our approach enables:

1. Complex, multi-step chemical conversions in one bioreactor pot. Conventional chemical synthesis usually requires each chemical step to be performed in separate reactions, necessitating individual product isolation after each step. The precision of enzymes and exozymes, all functioning in an aqueous medium, permits multi-step conversions within one container, boosting productivity and efficiency which can result in lower costs.

2. Environmentally friendly reactions. Traditional chemical synthesis often requires toxic solvents or catalysts and can require high temperatures and pressures. In contrast, enzymes operate in water under benign conditions, leading to less environmentally damaging conditions and much less toxic waste.

3. High product yields. Traditional chemical synthesis rarely matches the precision of enzymes and exozymes, resulting in inferior yields, especially across multiple steps. In cells, the many competing reactions lower overall conversion yield, a problem we can obviate by the highly controllable and engineerable exozymes platform.

4. Modular components enable quick system development. The platform is built on modular components or subsystems that are optimized for certain exozymes catalytic conversions from feedstock, over enzymatic step by step breakdown or built up, until you have the chemical end product of choice. These exozymes modules can be coupled for faster design of biosolutions, with new research and development limited to brand new steps, of an overall multistep biosolution.

5. Rapid reaction optimization through faster Design-Build-Test-Learn cycles. The exozymes platform offers clearer comprehension and control, and it can be easier to design and build biomanufacturing systems compared to the enzymatic pathways with competing and interdependent activities found in living organisms. As such, we can accelerate troubleshooting, de-bugging and foster precise engineering solutions, including improved versions of a biosolution.

6. Elimination of toxicity constraints allows for higher product titers. In cell-based conversions, products or intermediates can be toxic, resulting in halted production. Our approach, which is independent of living cells, can negate such issues.

7. Higher productivity can lead to lower CapEx: The platform can surpass both conventional chemistry and cell-based conversion rates, especially if higher enzyme loads or faster enzymes are utilized, leading to reduced operational footprints and capital expenses.

8. Simplification of product purification. Compared to chemical and cell-based methods, the platform maintains a simpler composition with generally fewer side-products, which can facilitate faster purification and potentially lowering downstream processing costs. Isolation cost of SynBio has often ended up being more expensive than the chemical product itself, nullifying any business potential.

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Our Business Model

eXoZymes is a pre-revenue, development stage company focused on building a robust technology platform that can develop assets (spinouts, JV and licensing deals) capable of being reapplied multiple times in different markets with only small changes, while maintaining and capturing new fundamental IP in each application. As a young company without a history of manufacturing, product development, or marketing endeavors, we seek partners with relevant manufacturing footprints and experiences to share costs, risks, and revenue related to the shared business opportunities that result from development and deployment of our exozymes based biomanufacturing solutions. Given the intricate nature and potential cost associated with developing and establishing biomanufacturing facilities for many kinds of molecules, at different batch sizes, and feedstocks, we plan to employ a focused strategy which centers on nutraceuticals-with-pharmaceutical-potential, to align most of the biosolutions we develop and commercialize. We believe that focusing on nutraceuticals-with-pharmaceutical-potential will allow us to reuse as much knowledge and infrastructure as possible from multiple biosolutions, from the R&D stage all the way up to ongoing biomanufacturing production realities.

As a cash-flow-negative, early-stage development company, eXoZymes is highly focused on achieving its next value inflection point—where the public markets will acknowledge and appreciate the assets we have built, enabling us to secure additional capital and/or explore opportunities to sell or license our developed applications.

Our initial business model will therefore look to commercialize (e.g. spinouts, JV and licensing deals) the best and most mature biomanufacturing solutions for a specific applications (e.g. a specific nutraceutical) that come from our exozymes technology platform. As a result, it becomes easier to recognize the value of these new technology assets (especially those that can provide competitive advantages in specific markets) and how they can stand on their own as specific product offerings. We believe we have at least three ways of demonstrating and communicating asset value:

• Spin-out (aka a fully owned purpose-built subsidiary – initially 100% owned by eXoZymes)

If and when we identify a business opportunity (via a specific market application for one of our exozyme biosolutions), we plan to establish a dedicated commercialization team to evaluate the challenge within a defined market, prepare the internal project, and establish requirements and milestones for the developed asset to be spun out as a fully owned subsidiary. As the internal asset matures both on the business and the technical side, we anticipate that the wholly owned asset will be spun out to form an independent company. Once the independent fully owned purpose-built subsidiary is formed, external partners (go-to-market partners, investors, new employees etc.) might join through investment and/or contribution of resources. We plan to use this model when we can see a path towards a significant value inflection point for the spin-out, where the value inflection point can be reached solely through the work and resources of the spin-out with the help of eXoZymes and when we know there is a partner, investor, or customer ready to recognize the value in a way that gives the spin-out runway to reach its next value inflection or an exit.

• Joint-ventures (and built-to-exit/built-to-order entities)

eXoZymes has seen significant interest from partners wanting to do joint ventures (JVs) where eXoZymes will develop and bring the biosolution to the JV and the partner will bring financing, expertise, and/or access to the market. In this model, we plan to collaborate with a partner to form a new subsidiary (in this case a JV) focused on a specific market opportunity, such that the partner has unique access to the asset developed or has a department that is already committed to further development and/or has resources to scale and commercialize. Under this scenario, each party would likely contribute essential capabilities, resulting in a combined effort that delivers greater value than the sum of its parts.

eXoZymes also has had conversations with partners to develop “built-to-exit/built-to-order” solutions, where a partner is interested in eXoZymes building a specific biosolution as a stand-alone company, so that the partner can then buy the solution if/when specific specifications and goals are hit. Some partners may even finance the “built to order” company, as long as they have an option-to-buy (possibly at a fixed amount). This solution exists because for some outside companies, it is better to acquire small companies than engaging in fixed licensing deals or sponsored research. This approach may be attractive to eXoZymes because it is a way of making sure that if eXoZymes takes any technical risk, it can also share all the upside after it is developed.

• Licensing

Licensing agreements are the typical focus of partnership conversations where partners operating in mature markets aim to optimize or replace all or part of their existing products or chemical production. These kinds of partners often look for a biosolution where they can pay eXoZymes for R&D costs plus pay a royalty percentage of future revenues. Depending on the balance of the deal a partner may want or have to pay a license initiation fee to gain access to and utilize the core technology in their field-of-use and/or countries of business.

All three routes to commercializing assets described above can lead to clearly identifiable value through building specific assets as well as short-term and long-term revenue. Short-term revenue may be in the form of access to eXoZymes platform and R&D fees, enzyme/exozymes sales, short term milestone payments. Long-term revenue may be in the form of licensing royalties and revenue sharing, and with time, sales of asset/ownership/exits.

While we believe some revenue might be generated from eXoZymes selling production of specialized enzyme/exozymes and/or selling development services, in the initial years, we may not seek substantial short-term profit/revenue from these services, since we would rather boot up our biosolutions for specific assets (e.g. small molecules) fast, instead of optimizing short term profits for the sub-system components (e.g. selling specific enzymes/exozymes). However, certain services and specialized enzymes/exozymes hold significant medium- to long-term potential. Given the short-term factors mentioned, investors and stakeholders should consider spin-outs, joint venture launches, and partnership deal announcements as key indicators of progress throughout the current and upcoming growth stages.

NCT Program Overview

eXoZymes is developing N-trans-Caffeoyltyramine (“NCT”), a naturally occurring small molecule identified as a potent activator of the HNF4α metabolic pathway, which plays a central role in mitochondrial function, fat oxidation, glucose regulation, and liver–gut homeostasis. It is believed that NCT targets what is often described as the body’s “master metabolic switch,” enabling a single pathway approach to addressing multiple interconnected metabolic disorders—including obesity, diabetes, and non-alcoholic fatty liver disease (NAFLD).

Preclinical mouse model studies demonstrated that NCT promotes significant metabolic improvements, including 30–40% body-weight reduction in animal models, a surge in mitochondrial biomarkers, and reductions in liver fat accumulation, all without changes in caloric intake. These data support NCT’s potential as a next generation nutraceutical ingredient and as a platform for future pharmaceutical analogs.

Development Strategy for NCT

N-trans-caffeoyltyramine (“NCT”) is being evaluated by the Company as a potential commercial product with two distinct development pathways: a nutraceutical pathway and a pharmaceutical pathway.

Nutraceutical Pathway

NCT is a naturally occurring molecule found in trace amounts in certain plants. While the compound has attracted interest over time, scalable production or isolation of NCT at high purity and commercially relevant quantities has remained a challenge. Because N-trans-caffeoyltyramine (“NCT”) is a naturally occurring compound, the Company expects to have freedom to operate with respect to NCT in its native form. This positioning may allow the Company to pursue commercialization of NCT as a nutraceutical product, subject to applicable regulatory requirements. The Company’s strategy in this business vertical is to utilize its proprietary cell-free biomanufacturing platform to produce high-purity NCT at commercial scale with consistent quality, with the objective of improving manufacturing efficiency, cost structure, and supply reliability.

Pharmaceutical Pathway

In parallel, the Company may explore the development of novel or new-to-nature variants of NCT, including analogs or derivatives, which may be eligible for patent protection and evaluated for potential pharmaceutical or disease-related applications. These activities are at an early stage and would require substantial additional research and development, including preclinical and clinical studies, as well as regulatory review and approval, prior to any potential commercialization. The extent and timing of any such efforts are expected to depend, in part, on the availability of capital resources and potential partnership opportunities

Process Technology Enabling Commercialization

Although NCT occurs in nature, it is found only in trace quantities (0.0014%) in peppercorns and other plants, making conventional sourcing impractical. Traditional synthetic chemistry routes are similarly cost-prohibitive and yield mixtures of less potent analogs.

eXoZymes’ proprietary cell-free biomanufacturing platform overcomes these bottlenecks, enabling:

• >99% reaction yield at pilot scale,
• 6× faster production cycles than conventional methods, and
• predictable, single-product precision without undesired by-products.

The technology delivers >99% food/pharma-grade purity, simplifying formulation and regulatory readiness. Because the process runs outside living cells, it offers lower cost, less variability, greater scalability, and complete control over each step in the enzymatic pathway.

This platform forms the core asset being transferred to NCTX, a subsidiary of the Company, and the exclusive commercialization entity.

Development Status

NCT has advanced rapidly from concept to commercialization of readiness. Key accomplishments to date include:

• Pilot-scale production achieved in <1 year, demonstrating commercial feasibility.
• Successful tech transfer to external pilot plant operator completed, including SOPs and analytical standards.
• High-purity material validated, with >99% purity.
• Scale-up planning underway, including downstream optimization, CMO screening, and supply chain readiness.

NCTX is preparing to launch NCT as a branded nutraceutical ingredient, supported by a capital-light, asset-light model leveraging contract manufacturers (CMOs).

Intellectual Property

We believe eXoZymes’ inventions cover a wide range of technologies and innovations related to biomanufacturing. These inventions include new chemical entities, composition of matter IP on novel and engineered individual enzymes with changes in stability, activity, specificity, or a combination thereof, as well as systems of enzymes designed for pioneering novel manufacturing processes. Additionally, our inventions include cofactor and metabolite management assets optimized for sustained reaction continuity, and advancements in enzyme expression strains and processes. We protect our technological edge through a combination of patent applications, trade secrets, and professional know-how and competitive advantages that only may be known by a subset of our corporate organization. At present, eXoZymes has a portfolio of patents and patent applications, filed in the United States and other countries, that are deemed relevant and are positive value vs the inherent cost. Additionally, we have several additional IP assets including invention of disclosures and proprietary trade secrets. Included in our patent portfolio, is a license for a suite of patents from the Regents of the University of California, which safeguard different aspects of co-factor regeneration, cannabinoid biosynthesis, and engineered enzymes, from the work of our co-founders before the efforts was spun-out as the company we are today. We believe that our consolidated IP position and portfolio provide a defensible position that enables the creation of complex, robust, sustainable biosolutions enabling significant competitive advantages.

To provide a defensible position and foster innovation, we may establish research and development programs that continue to ensure our lead position in this biomanufacturing technology vertical. Through those potential research and development programs we intend to further develop IP that will target the following domains:

• Comprehensive biosolutions, systems, elements and methods for cell-free exozymes biomanufacturing.
• Biomanufacturing processes tailored to nutraceutical and pharmaceutical (e.g. rare and new-to-nature cannabinoids) production and derivatization.
• Natural products and natural product analogs (first focusing on nutraceutical, pharmaceutical-oriented compounds) and methods that enable their biomanufacturing.
• And commodity chemical and fuel etc. systems and biomanufacturing when extraordinary opportunity presents itself – like our isobutanol project.

Key terms of the license agreement with the Regents of the University of California

On April 26, 2019, we entered into a licensing agreement with The Regents of The University of California, through the University of California, Los Angles (“UCLA”). This agreement pertains to certain patent rights, notably encompassing: (i) pathway designs for the balance of co-factors in a cell-free system, and (ii) cell-free platform for the prenylation and a designed enzyme for cannabinoids biosynthesis. We hold a worldwide exclusive license to the valid claims of the patents held by The Regents and a non-exclusive license to the associated technology, with the right to sublicense, import, make, have made, use, provide, offer to sell, and sell all products derived from the technology covered by the license agreement. The licenses extend to affiliates of the Company. The Regents have retained the right for itself to use the patents for educational and research purposes, publishing and performing clinical diagnostic and prognostic services of its healthcare system.

The initial license fee was $6,000 and the continuing license maintenance fee is $2,500 per year. The license requires a minimum annual royalty, initially in the amount of $15,000 rising to $50,000 starting in the third year of the license. eXoZymes is to pay The Regents a royalty on the net sales of licensed products equal to two percent with respect to therapeutics products, and one percent with respect to all other products, payable quarterly. To date, the Company has not developed products that have generated net sales on which a royalty is due. eXoZymes is also to pay an initial sublicensing fee equal to 15% which falls to 8%. There are additional milestone payments due based on net sales equal to $250,000 on the first $1,000,000 of net sales of an initial licensed product and then $350,000 when a second licensed product has $2,000,000 of net sales.

The aggregate of payments made to the Regents in connection with our license agreement with the Regents, from 2019 to December 31, 2025, is $400,211. This includes payments for patent fees associated with the license and maintenance fees. In addition, the Regents were issued an aggregate of 249,689 shares of the common stock of eXoZymes. The Regents have entered into a one-year market stand-off agreement with respect to its shares of Common Stock.

eXoZymes is required to use commercially reasonable efforts to achieve specified development milestones. If these are not achieved then The Regents has the right and option, at its sole discretion, to either terminate this Agreement or reduce the exclusive license to a nonexclusive license. We believe we have met the milestones and retain the license on an exclusive basis. The term of the license is for 10 years after the first commercial sale of a licensed product that triggers an earned license fee. We are required to carry specified levels of insurance, maintain certain records and provide copies to The Regents of specific reports, and provide for certain ongoing patent costs.

Regulation

As eXoZymes continues to develop and optimize its exozyme-based biosolutions and their applications to make chemical products for use in the nutraceutical, pharmaceutical and isobutanol/biofuels industries, these products will require the Company to address regulation of different kinds. Depending on the particular product and marketing pathway, we may have to address regulatory compliance ourselves or we may be able to require a third-party licensee to undertake meeting the regulatory requirements of our product as a stand-alone licensed product or in conjunction with their own product.

Health Product Regulation

The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of chemicals such as those that we may develop. eXoZymes, or third-party contractors or licensees, may be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the United States and other countries for which we wish to conduct studies or seek approval of any of our clinical use or otherwise regulated products. Companies involved in the production of pharmaceuticals are also subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation: the federal Anti-Kickback Statute (“AKS”); the federal False Claims Act (“FCA”); the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.

Even where the particular product is only to be used topically or in edible products, the Federal Food Drug and Cosmetic Act, extends regulation to foods, dietary supplements, cosmetics and veterinary products. Nutraceuticals and cannabinoids are used in a variety of topically applied lotions, salves, oils, sprays and transdermal patches. Cannabinoids, as an example of our nutraceuticals, are also found in products that one eats. State regulation in about half of the states of the United States extends to a variety of product attributes that include cannabinoids, including (i) the percentage of a cannabinoid that may be included in these kinds of products, (ii) warning labels, (iii) restrictions on packaging to protect children and child resistant packaging, (iv) application of general food safety regulations, such as food production, packaging and handling, (v) prohibitions on the kinds of products that can contain or be infused with cannabinoids, and (vi) the appearance of products that contain cannabinoids. Some forms of synthetic cannabinoids have been banned from being used in connection with human intended products.

There is currently new regulatory efforts to reclassify cannabinoids from a Schedule 1 drug to a Schedule 3 Drug, and additional regulatory efforts in defining intoxicating vs non-intoxicating cannabinoids. The Company intends to follow all current (as described below) and future regulations.

New chemical small molecule compounds that go into foods or are used as dietary supplements, which have health claims attached, are subject to regulation as set forth in the U.S. Dietary Supplement Health and Education Act of 1994. The FDA does not approve dietary supplements, but it does regulate them for safety. As such, regulations would be under various FDA requirements and the New Dietary Ingredient notification process. However, if the molecule compounds are used in cosmetics, it does not require FDA approval prior to going to market, which is the same as for dietary supplements, as long as they have been tested for safety.

Specifically relating to tetrahydrocannabinol (THC, the gem dimethyl cyclized ether of cannabidiol specifically with a 5-carbon alkyl chain on the resorcyclic acid moiety) and its psychoactive derivatives, per 21 C.F.R. § 1308.11(d)(31) (7), if the small molecules are derivatives of THC, they may be subject to federal regulations. As such, this would require any such derivatives to follow the FDA Drug Development schedule for Clinical Trials. The FDA regulatory pathway for drugs would govern activities related to these compounds. However, if the compounds are not tetrahydrocannabinol analogs (e.g. the alkyl chain is less than 5-carbons or the compound contains a different cyclization pattern), then they would likely be subject to regulations set forth in the 2018 Farm Bill (and/or the U.S. Dietary Supplement Health and Education Act of 1994). For example, tetrahydrocannabivarin, which is a THC analog but with a 3-carbon alkyl chain instead of a 5-carbon, may or may not be subject to the 2018 Farm Bill if it is made synthetically as opposed to being extracted from the hemp plant.

The FDA and congress are continually updating their cannabis and cannabinoid policies, so we believe that regulations are likely to change. Other uses that are likely not subject to regulation (as long as it is not a THC analog as described above) by the FDA are cosmetics, supplements, and dietary aids as long as there are no health claims associated with the product, and they are safe as described above (or it is not a cosmetic/topical drug). Where cannabinoids are used as analytical standards or research aids, these would also not be regulated.

BioFuel Regulation

Numerous pieces of Federal legislation impacting the oil and gas industries have been passed by Congress over the last many decades. Some of these statutes include (i) the Interstate Commerce Act of 1887 that regulates interstate transportation of fuels, (ii) the Energy Policy Act of 2005 that outlines the incentives and benefits for oil and gas producers that help make the United States energy self-sufficient and also establishes the renewable fuel standard (RFS) program where gasoline must be blended with renewable fuel, (iii) the Clean Air Act, the Clean Air Act Amendments of 1990 and the Clean Air Act Extension of 1970, and subsequent amendments, dictate fuel standards, including banning leaded gasoline, and (iv) the Energy Independent and Security Act of 2007 that expanded the renewable fuel standard (RFS) program, in addition to increasing fuel economy standards. The Environmental Protection Agency (EPA) currently administers the RFS to impose an annual minimum volume of biofuels based on the estimated total volume of transportation fuels. Since the RFS indirectly subsidizes capital investment in the construction of biofuels plants, the RFS is expected to continue to stimulate and shape growth in the biofuels industry.

Governments at different levels in the United States have introduced various support policies to promote alternative and renewable energies. These policies aim to reduce greenhouse gas emissions and to improve energy security. Major policy initiatives include biofuel mandates and tax credits. It is widely expected that these policies will significantly affect both the environment and the economy of the United States. For example, biofuel production has effectively changed the role of agriculture by creating a linkage between the agricultural and energy sectors. Economic research indicates that the biofuel mandate has significantly affected agricultural commodity prices, which has caused a structural shift in land use and crop production.

For biofuel to be sold in the U.S. market, the fuel must meet certain quality specifications. In the United States, biofuel must meet the American Society for Testing and Materials (ASTM) requirements for biofuel fuel. There are similar standards in Europe. Additionally, standards and regulations also address safety related issues, which is in part under the purview of the Occupational Safety & Health Administration. All these standards, however, are in constant development and change, and are challenging the means of analysis, grouping and standardization. Biofuels have significantly different chemical compositions from hydrocarbons, which means different physical and fuel properties. Where hydrocarbon fuels have a very extensive system of industrial standards and testing, biofuel standards and testing methods are still being developed. Because biofuels are being created and developed at such a rapid pace and with ever greater complexity, the standards, testing and regulation is constantly evolving to keep up.

The properties of biodiesel, for example, depend on several factors, including the feedstock and the refining process. Producers who follow standard procedures to make the fuel, such as those of the Biodiesel Production Principles and Processes Guidelines and the ASTM, will have a better chance of producing fuel that meets the specifications for sale and use. The standards generally focus on (i) flash point, (ii) water and sediment, (iii) kinematic viscosity, (iv) sulfated ash, (v) sulfur, (vi) corrosion, and (vii) combustion, along with a significant number of additional criteria. Similar to biodiesel, purchasers of other biofuels will also require testing and adherence to public standards and their own requirements and test their purchased biofuel product for meeting the various standards that exist and that may be established. For example, these standards are meant to provide quality specifications so that there are no adverse consequences from their use or inclusion in another form of fuel such as engine seizure, filter plugging, and adverse emissions. It is expected that safety standards will also predominate regulation as biofuels gain use in more fuel products or energy supply systems.

As biofuels are developed and successive generations of production processes and products are created, we expect that environmental sustainability issues will be addressed and regulation will evolve. Biofuels are being promoted as a low-carbon alternative to fossil fuels as they could help to reduce greenhouse gas emissions and the related climate change impact from transport, among other uses. However, as there are concerns that their wider deployment could lead to unintended environmental consequences, it is expected that policies and forms of regulation or incentives will emerge to evaluate, monitor and control the broader impact of their use. To date, the findings about the impact and benefits of biofuels are often conflicting, with a wide variation in their conclusions. We believe that the studies and findings are highly situational and dependent on many factors, including the type of feedstock, production routes, data variations, and methodological choices. Currently, there are studies that show that reductions in greenhouse gas emissions from biofuels are achieved at the expense of other impacts, such as acidification, eutrophication, water footprint, and biodiversity loss. These will have to be addressed as the industry evolves, and processes will have to be developed to address these issues.

Competition

We believe eXoZymes is at the forefront of multi-step cell-free biocatalysis aka exozyme system development for the production of diverse chemicals. While use of simple enzymes for single step conversions are commonplace in a variety of industrial processes, we believe the uniqueness of eXoZymes’s technology lies in its ability to build multi-step, complex, yet robust and efficient, enzyme modules and exozymes biosolutions to be used for biomanufacturing.

In the space of cell-based synthetic biology, considerable efforts have been, and are being, devoted to engineering living organisms to produce useful chemicals ranging from high-value natural products like cannabinoids to commodity products such as, fuels, plastics, and building block chemicals. Given the broad and growing attention to the environment and the environmental benefits of synthetic biochemistry, many players are attracted to the industry. Currently, there are many companies in the synthetic biology space and in the related application markets, including well-known firms operating in the industry segments of life science and biology solutions, pharmaceuticals, alterative meat, beauty, agriculture, automobile, fashion etc. The number of companies and scope of industry segments touched upon demonstrate that this is an active, developing industry.

We believe that we will face competition from many companies and research institutions that are currently working in, and will enter, the future cell-free biocatalytic and exozymes industry to work on the many aspects of cell-free synthetic biochemistry. Debut Biotech and Solugen Inc. promote the advantages of cell-free enzymatic systems over cell-based systems, but their processes appear to use simple one to two step pathways. Codexis, Inc. partnered with Tate & Lyle and Merck & Co., Inc. on different, highly specific projects that use multi enzyme pathways, such as enzymatic Islatravir synthesis, illustrating the potential for complex enzyme cascades, but their principal mission diverges from the enzymatic manufacturing of more general chemicals. There are many companies that focus on enzyme engineering, such as Codexis, Inc., Allozymes Pte Ltd. (Singapore), Enzymit Ltd. (Israel and US), Zymtronix Catalytic Systems, Inc., Arzeda Corp. and Quantumzyme LLP (India). There are other companies that develop enzyme immobilization technologies. There are a number of companies operating in the biofuels space, such as Valero Energy Corporation, ADM Corporation, Cargill Company, Gevo, Inc. and Butamax Advanced Biofuels LLC that focus on ethanol technologies. There are a number of companies in the nutraceutical and pharmaceutical industries that are pursuing, or may in the future pursue, the same or similar target molecules as those being developed by the Company. For example, Brightseed Bio is focused on the discovery and development of plant-derived bioactive compounds, including molecules such as N-trans-caffeoyltyramine (“NCT”), and such companies may compete directly with the Company’s development and commercialization efforts

Additionally, we believe that we will also compete against the numerous companies around the globe that dominate particular market segments for products made or sourced using synthetic chemistry or via natural extraction.

We believe that the majority of companies that present some aspect of competition are well-established companies that have more experience identifying and carrying out the scientific development required of products that will be competitive to those of eXoZymes. Many of these companies have, and others that we anticipate entering the market in the future, will have greater financial and management resources, brand or scientific name recognition or industry contacts than we possess. A number of companies are multinational companies, and many are also publicly listed companies, with large market capitalizations.

We believe that we compete with those firms based on a number of factors, including

• our founder’s reputation and history,
• our work and successes to date since founding,
• our willingness and ability to strategically partner with other companies,
• the overall abilities and experience of our management and staff, and
• our ability to use our technologies to develop new products and chemicals for their potential commercialization opportunities.

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We also believe eXoZymes will compete based on our unique technological approach. We believe our scientific approach and proprietary technologies are not as specialized and limited as those of our competitors, thereby opening product pathways for a plethora of more diverse chemical manufacturing applications. We believe that our intellectual property, including our trade secrets, our special methods of doing e.g. recycling of essential cofactors may allow us to operate extensive multistep processes outside of a living cell, in a production-effective manner that will allow us to compete effectively. This example represents a competitive advantage over traditional synthetic biochemical companies.

In the biofuels sector, we do not compete directly with ethanol producers because our primary target, isobutanol, is widely regarded as a superior biofuel due to its higher energy density, than ethanol allows for, and the use of ethanol and isobutanol therefore is very different and distinct.

Employees and Facilities

eXoZymes’s forward-looking strategy anticipates upscaling in terms of both personnel and manufacturing capabilities over the coming years. We expect our expansion will span our operational segments, including business development, research and development (R&D), fermentation/enzyme production, and pilot-scale chemical production.

As of December 31, 2025, eXoZymes boasts a dedicated team of approximately 32 full-time employees or equivalents. Among them, 9 hold doctoral degrees. Twenty employees focus on R&D efforts; four are dedicated to pilot projects, while the remaining eight concentrate on business development, finance, and general administration. In addition to expanding our business development efforts, eXoZymes plans to expand both R&D and manufacturing scaling efforts, which will require us to bring on new hires in multiple departments. These hires will be responsible for sales efforts, pioneering processes, innovations, and ramping up production scales.

None of our employees are affiliated with labor unions or are part of a collective bargaining agreement. We believe we have a positive and harmonious work environment and our employee relations are good.

Facilities

Our headquarters and R&D facilities are currently located in Monrovia, California. We lease approximately 10,000 square feet of recently renovated space. Of the total space, a portion is reserved for R&D pilot activities and the balance of the space is split among the general and administrative office, R&D laboratory requirements, fermentation uses to develop and produce needed enzymes, and to house an analytical lab. The Company believes its existing facility is in good operating condition and suitable for its future operations

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.

Business Risk Factors

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

eXoZymes was founded in 2019, and was focused on developing our science and technology in the first 5 years. We are a pre-revenue, development stage synthetic biochemical company, despite now investing significant time and resources into productizing and commercializing our technology. We have only a limited operating history and only have incurred losses to date. Therefore, there can be no assurance that the development efforts of eXoZymes will produce commercially viable processes or potential products, achieve market acceptance, or generate revenues that will sustain its business, despite that is what we are working hard to achieve. With a limited operating history, no marketing track record, and no commercialized products at this time, it will be difficult for investors to make predictions about the future success or even the viability of eXoZymes, and any predictions may not be as accurate as they could be if the Company had a longer operating history or a history of successfully developed, commercialized products and generating revenue from products.

We cannot assure you that we will generate revenue or become profitable in the future.

As we are a pre-revenue, development-stage technology company, we do not expect to generate revenue or net income until we successfully commercialize our first products over a significant period. As of this date, our technology is still largely in development, and the limited number of products are being produced only at lab scale quantities. We are incurring operating losses, and we cannot assure you that we will generate revenue or be profitable in the future. Our products in development and our future products may never reach commercial scale quantities or become commercially viable. Even if we find commercially viable applications for our technology, which may include licensing, we may never recover our research and development expenses and other start-up expenses.

We may need additional capital to support our growth over time. Additional capital may be difficult to obtain thus restricting our operations and resulting in additional dilution to our stockholders.

Over time, we anticipate that the business will require additional capital to implement the long-term business plan of product development and commercialization. As we require additional funds, we may explore future financing arrangements for the Company as a whole and financing specific segments of our business by using additional private and public offerings of our securities, borrowings, spinouts, joint ventures, licensing, asset sales and merger transactions. We also may seek government research grants, as they may be available. We cannot be sure that additional financing from any of these sources will be available when needed or that, if available, the additional financing will be obtained on terms favorable to us or our stockholders. If we raise additional funds by selling equity-based securities, the ownership interest of our current stockholders will be diluted. If we are unable to obtain additional funds on a timely basis or on terms favorable to us, we may have to cease or reduce certain research and development projects, to sell some or all of our technology or assets or business units or to merge all or a portion of our business with another entity.

In the future, we may not be able to obtain government and private grants which have been an important source of funding our operations since inception.

From inception through December 31, 2025, eXoZymes has received grants totaling $17,697,378, of which $4,058,367 was awarded in 2025 and $1,048,302 was awarded in 2024. In the past government funding and private funding have been an important source of funds for the operations of the Company. There is no assurance that we will continue to be able to draw on any outstanding US government grants or other private grants or be able to obtain new grants. If we are not able to obtain government and other grant funding, we may have to limit our operations or may have to raise additional capital from other sources. Currently, we do not have any identified sources of funding. Other sources of funding may be dilutive to our shareholders or more costly than past sources of funding.

We are unsure if and when eXoZymes will become profitable.

We have not yet demonstrated our ability to generate revenue, and we may never be able to produce material revenues or operate on a profitable basis. We expect to experience operating losses and negative cash flow for the foreseeable future. We expect to expend significant cash resources on hiring personnel, continued scientific and potential product research and development, potential product scaling, intellectual property development and prosecution, marketing and promotion, capital expenditures, working capital, and general and administrative expenses. We expect to incur costs and expenses related to consulting costs, laboratory development costs, hiring of scientists, engineers, science and other operational personnel, and the continued development of relationships with strategic and collaborative partners. We may not be able to obtain financing in a sufficient amount or at all, or on terms that are acceptable to us. We anticipate that our losses will continue to increase from current levels during our continuing development stage.

eXoZymes may not be successful in its efforts to use its proprietary biomanufacturing platform to build a pipeline of products.

A key element of eXoZymes’s strategy is to use its experienced management, engineering and scientific teams to build a pipeline of products using its exozymes biomanufacturing platform and further develop those products into commercially viable chemical products better, faster and cheaper than possible using traditional materials and methods. Although its research and development efforts, to date, have resulted in what we believe to be potential products, we may not be successful in further developing products to the level of commercial viability or be able to continue to identify and develop these and other products. Even if it is successful in continuing to build a pipeline of products, not all potential products it identifies may be suitable for development and use in commercial products. If eXoZymes is unsuccessful in these efforts, the value of the Company may be significantly limited or lost, our investors may suffer a loss in relation to their investment in the Company, and eXoZymes may have to curtail or cease its business.

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

The viability and benefits of our products in development, which currently include neutracuticals and pharmaceutical oriented products, and isobutanol (a 2G biofuel), may be difficult to assess because they are based on a relatively novel and complex technology. eXoZymes’s technology consists of using cell-free multi-step enzymatic bioconversion systems that we have named exozymes biosolutions. The exozymes platform and the limited number of products that we are developing are currently in various stages of research and development, limited pilot production phase and/or pre-clinical assessment as a therapeutic or product for other uses. It may be 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 product may 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 eXoZymes continues to develop and optimize its platform and processes to make what it has determined to be the initial potential products in the quantities needed for research, clinical or testing evaluation and manufacturing, there can be no assurance that such products will be understood, approved, or accepted by clients, regulators and potential investors, that the relevant platform and processes can be used for commercial manufacturing, or that it will be able to sell products at competitive prices and with features sufficient to establish demand and generate revenues or any level of profit. Another consideration if a product is a candidate as an active pharmaceutical ingredient, then it will require FDA and/or other applicable regulatory approvals, including manufacturing approvals, which may not be obtainable. If it is unable to convince potential clients of the utility, approvability and value of its 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.

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

eXoZymes is operating in a rapidly growing and changing business space within, or as a competitor to, the synthetic biology market. Therefore, the market is becoming more developed and highly competitive. eXoZymes may have to continually assess the overall market, and the application markets and what kinds of products will be in demand. If it fails to anticipate market demands or is not able to meet a market demand in a timely fashion, its research and development efforts may not pay off as expected or at all. The intellectual property aspects of this market are constantly evolving, and patents filed several years ago by potential competitors are currently being granted, which may force eXoZymes to license technologies it needs for its processes or to develop a workaround to the valid claims of others. eXoZymes may not be able to obtain any necessary licenses or develop processes that do not infringe on others; in which case its business may be impaired, and it may be prevented from executing its business plan. The cell-free synthetic biology market in which eXoZymes 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.

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

Because bio-synthesized compounds are still considered 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, eXoZymes 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 in development and commercialization, which will result in additional funding requirements that may not have been anticipated. eXoZymes may never achieve the required approvals in which case its business model will be impaired, and eXoZymes may not be able to achieve commercial success.

Because its chemical and small molecule compounds are novel, eXoZymes may have to perform tests for safety, use, approval and claim validation.

We anticipate that, because some of the compounds are unique, eXoZymes will face all the hurdles of a new technology in the marketplace. Depending on the use of the compounds, eXoZymes may have to comply with the extensive array of medical and other areas of regulation depending on the use of the particular compound. In addition, it anticipates having to conduct many forms of tests, data generation and analysis to convince regulators, commercialization partners and potential users of the safety, uses, and claim validation to be able to get relevant approvals, commercialize and gain market acceptance for its chemical 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 shares of Common Stock may lose value in their holdings.

eXoZymes is highly dependent on its ability to retain its current management and its scientific team and other staff to run the company, and be able to recruit and hire additional employees with specialized backgrounds as needed.

In this early stage of the scientific research and development of its platform and its commercial journey, eXoZymes is highly dependent on retaining and properly motivating its current management and scientific team, and other key staff. We believe that our future success depends on retaining such persons, particularly those with key knowledge about the exozymes technologies, eXoZymes as a complex company, the potential chemical products, partnerships and development projects and our business strategy, objectives, goals and plans, relative to the overall biochemistry industry. Success also depends on being able to expand its employee base as required. We believe there are relatively few people with specific knowledge of exozymes biosolutions and cell-free synthetic biology. People with the talents that eXoZymes seeks to hire tend to be in high demand and it may not be able to hire such people as and when needed. The inability to hire and retain necessary employees may have an adverse impact on its business implementation. In the worst case, losing too many key people would bring eXoZymes to a stop.

Our ability to retain our senior management and recruit additional senior management is important 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 ability to hire senior executives and managers with the managerial abilities that we need as we grow and expand will greatly influence our success. Despite our efforts to retain members of our management team, these persons may terminate their employment with us on short notice. The loss of the services of any of our executive officers or other key management and 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.

Laboratory conditions differ from commercial conditions, which could affect the effectiveness of our potential products. Failures to effectively move from laboratory to commercial scale would harm our business.

Observations and developments that may be achievable under laboratory circumstances may not be able to be replicated in commercial settings and scales. We have observed multiple results that encourage the development of our technology platform. We, however, are not certain that these laboratory results will be able to be replicated at a commercial scale. As we advance our technology, we plan to make products at higher scales until we reach commercially viable scales. If these results obtained at the current levels are not replicated on a commercial scale the attractiveness of the technology will be adversely affected and our business may fail to be successful.

Our systems rely on the need for purified enzymes and co-factors for the conversions of input feedstock into final products. We will need to find competitively priced sources of, or ways of making these inputs for our process to be cost competitive and/or develop methods to use these resources efficiently.

We have observed continuous conversion of input feedstock, the raw material from which a product is made, into the final product for a time period of seven days. Longer running conversions, we believe, will optimize the use of enzymes and co-factor in the platform, making the biochemical process efficient. Targeted feedstock for our current products are primarily sugars or other readily available chemicals. We believe we can further optimize our technological systems to continue running for longer than seven days thus optimizing the use of our enzymes and co-factors. Co-factors in our processes are energy molecules such as ATP (adenosine triphosphate, which is a molecule that stores and releases energy in cells) or NADPH (nicotinamide adenine dinucleotide phosphate, which is a molecule that is an essential electron donor and provides the reducing power for anabolic reactions and redox balance). If we fail to find competitively priced sources of these inputs and/or if we fail to show long periods of continued reactions at larger scales our system might not prove to be competitive.

We will be subject to fluctuations in pricing for the products we choose to develop and commercialize.

We prioritize the products we choose to develop by using a number of parameters including the margin between market pricing or expected market pricing versus our expected production cost. Fluctuations in pricing below our cost to manufacture would make the commercialization of such products unfeasible. The result would be that we would not be able to sustain our business from revenue, and as a result we may have to curtail or cease operations.

Our business depends upon our ability to make good decisions regarding the deployment of capital and, ultimately, the performance of our products which is uncertain.

If our management and scientific staff make poor decisions regarding the deployment of capital into new or existing research, products and strategic partners for commercialization, our business model may not succeed. Our success ultimately depends on our ability to choose the right products, services and companies to further commercialize our science. If one or more of these aspects of our business and decisions do not succeed by themselves or together, 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 Common Stock to decline.

Our success depends, in part, on the successful development of our science technologies and our products.

To be successful, we will need to continue to develop our science technologies and the products that we can offer to commercialization entities. If we do not anticipate correctly and respond with products that are commercially acceptable, we will not be successful. In that event, the value of our business and overall company value would be diminished.

We are subject to risks relating to portfolio concentration.

Currently, our business is highly dependent on a small number of developments for biosolution projects and chemical products, which are based on our principal technology. If these products cannot be fully commercialized or are not accepted in the market, we will have expended significant financial, development and corporate assets that will not necessarily be recovered. Therefore, investors may lose a portion or all of their investment in eXoZymes.

We are subject to risks related to our NCT program and commercialization efforts.

NCT represents the first to market product created by eXoZymes which has multiple layers of risk. These include the following:

• Results to date are primarily in animal models and there remains uncertainty whether activation in humans will demonstrate the same effects observed in preclinical models.
• Although eXoZymes has validated pilot-scale production, the technology may face unforeseen challenges during full CMO scale-up or industrial transfer.
• NCT is not yet evaluated by the FDA and is not intended to diagnose, treat, cure, or prevent disease. Nutraceutical regulatory pathways (GRAS/NDIN) carry uncertainty in timing and outcome.
• The nutraceutical market is competitive, and consumers often report inconsistent results from supplements; failure to differentiate our NCT product from others in the market meaningfully could affect adoption.
• NCTX’s business model relies on CMOs and partners; disruptions in supply chain, delays in manufacturing validation, or partner performance issues could materially affect timelines.

We do not have any manufacturing and distribution capabilities or arrangements, and will need to create these as we move towards commercialization of our products.

We do not yet have manufacturing arrangement or distribution capacity. We will need to develop all of the foregoing elements of commercialization. We plan on seeking development and marketing partners and license our technology to others or develop contract manufacturing partners to avoid our having to provide the full range of go-to-marketing, manufacturing and distribution capabilities within our organization for each of the focus and applications markets. There can be no assurance that we will find any development and go-to-market partners or companies that are interested in licensing our technology. If we are unable to establish and maintain adequate sales, licensing, go-to-market, marketing and distribution capabilities, independently or with others, we will not be able to generate product revenue and may not become profitable.

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

We will likely seek to collaborate with third parties to engage in aspects of product research, testing, marketing, manufacturing, and distribution as part of our commercialization strategy. If we are not able to enter into these kinds of agreements or maintain collaboration arrangements, as needed and on reasonable terms, our ability to develop our 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, we may need to obtain the use of intellectual property rights held by third parties in order to develop our products. As a result, the growth of a particular business endeavor or product may depend in part on the ability to acquire or in-license these intellectual property rights.

Future collaboration arrangements 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 our technologies and products or products the collaborators have may be viewed as competitive with our technologies and products causing them to cease to devote resources to the commercialization of our products;

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

(vi) collaborators may not commit sufficient resources to the marketing and distribution of our 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 us, 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, we may require more capital to pursue further development or commercialization of the applicable product or service; 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.

We expect to experience competition from other companies and research institutions.

Considerable efforts have been, and are being devoted to engineering living organisms to produce useful chemicals ranging from high-value natural products like cannabinoids to low-value products such as, fuels, plastics, and building block chemicals. Given the broad and growing attention to the environment and the environmental benefits of synthetic biochemistry, many players are attracted to the industry. Currently, there are many companies in the synthetic biology market, including well known firms operating in the industry segments of life science and biology solutions, pharmaceuticals, meat, beauty, agriculture, automobile, and fashion. The number of companies and scope of industry segments touched upon demonstrate this is an active, developing industry.

We believe that we will face competition from many companies and research institutions that are currently working in, and will enter the industry to work on all the many aspects of cell-free synthetic biochemistry. Debut Biotech and Solugen Inc. promote the advantages of cell-free enzymatic systems over cell-based systems, but their processes appear to use simple one to two step pathways. Codexis, Inc. partnered with Tate & Lyle and Merck & Co., Inc. on different, highly specific projects that use multi enzyme pathways, which demonstrate that enzymatic Islatravir synthesis illustrates the potential for complex or longer enzyme cascades of the type used in some of our eXoZymes systems, but their principal mission diverges from the enzymatic manufacturing of more general chemicals. There are many companies that focus on enzyme engineering, such as Codexis, Inc., Allozymes Pte Ltd. (Singapore), Enzymit Ltd. (Israel and US), Zymtronix Catalytic Systems, Inc., Arzeda Corp. and Quantumzyme LLP (India), Adaptyv (Switzerland), Zymvol (Spain). There are other companies that develop enzyme immobilization technologies. There are many companies operating in the biofuels space, such as Valero Energy Corporation, ADM Corporation and Cargill Company and Gevo, Inc. and Butamax Advanced Biofuels LLC that focus on ethanol technologies. There are a number of companies in the nutraceutical and pharmaceutical industries that are pursuing, or may in the future pursue, the same or similar target molecules as those being developed by the Company. For example, Brightseed Bio is focused on the discovery and development of plant-derived bioactive compounds, including molecules such as N-trans-caffeoyltyramine (“NCT”), and such companies may compete directly with the Company’s development and commercialization efforts

We believe that a majority of the companies that present some aspect of competition are well established companies that have more experience identifying and carrying out the scientific development required in the research and development of products that will be competitive to those of eXoZymes. Many of these companies have, and others that we anticipate entering the market in the future will have, greater financial and management resources, brand or science name recognition or industry contacts than we possess. A number of the companies are multinational companies, and many are also publicly listed companies, with large market capitalizations.

In addition to established industry participants, we may also face competition from emerging startups and early-stage companies seeking to develop similar target molecules or enabling technologies. These companies are often founded around novel scientific approaches, including artificial intelligence–driven discovery platforms, synthetic biology, or alternative biomanufacturing methods, and may target similar applications in the nutraceutical and pharmaceutical markets.

However, many of these early-stage companies are in the initial phases of development and typically operate with limited financial resources, constrained infrastructure, and smaller management teams. As a result, they may lack the capital, scale, and operational capabilities required to advance from early discovery through commercialization.

We believe that we compete with these firms based on a number of factors, including our founders’ reputation and history, our work and successes to date since founding, our willingness and ability to strategically partner with other companies, the overall abilities and experience of our management and staff, and our ability to use our technologies to develop new products and create products for potential commercialization opportunities. We also believe we compete based on our unique technological approach. We believe our scientific approach and technology is not as specialized as those of our competitors, thereby opening product pathways for a plethora of more diverse chemical manufacturing applications. We believe that our intellectual property on recycling of essential cofactors will allow us to operate extensive multistep processes outside of a living cell. This represents a competitive advantage over traditional synthetic biochemical companies. In the biofuels sector, because isobutanol is our primary target due to it being widely regarded as a superior biofuel, we do not compete directly with ethanol producers.

Risks Related to Intellectual Property and Other Legal Matters

If we are unable to protect the intellectual property used in our technology platform and products, others may be able to copy our innovations which may impair our ability to compete effectively in our markets.

As of December 31, 2025, we have a number of licensed patents, issued patents and patent applications with the USPTO. In addition to the patents and patent applications, we have several other invention disclosures and proprietary trade secrets. The licensed patents are for a suite of patents issued to the University of California, Los Angeles (UCLA), which safeguard different aspects of recycling co-factors (i.e. energy molecules), cannabinoid biosynthesis, and stable enzymes, which are enzymes that have been engineered for thermostability or other attributes that allow the enzyme to last longer and/or perform more effectively during the enzymatic process. This current consolidated portfolio provides a defendable position that enables the creation of complex, robust, sustainable enzyme systems.

We also are pursuing patent applications in jurisdictions other than the United States where we believe such protection is warranted in relation to the development and marketing of our processes and products.

As our research develops, we believe the eXoZymes’s inventions and license will be able to cover a wide range of technologies that relate to biomanufacturing. These inventions include new chemical entities, composition of matter intellectual property on novel and engineered individual enzymes with changes in stability, activity, specificity, or combination thereof, as well as systems of enzymes designed for pioneering novel manufacturing processes. Additionally, our intellectual property includes cofactor and metabolite management optimized for sustained reaction continuity and advancements in enzyme expression strains and processes. Also, metabolites resulting from the degradation of a molecule, can be used as a fingerprint or to identify those parts of a molecule that can modify the speed of or stop an enzyme reaction, and which we can then use to manage the reaction timing of our platform.

Our patent applications, and even issued patents, may be challenged or fail to result in issued and functional patents and our existing or future patents may be too narrow to prevent third-parties from developing or designing around our intellectual property and in that event we may lose competitive advantage and our business may suffer. Further, the patent applications that we license may fail to result in issued patents. The claims may need to be amended, and there might be mistakes in the patent processes that make our patents less valuable or functional. Even after amendment, a patent may not issue and in that event, we may not obtain the exclusive use of the intellectual property that we seek and may lose competitive advantage which could result in harm to our business.

If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.

In addition to patents and patent applications in respect of our technology, we rely upon, among other things, unpatented proprietary technology, processes, trade secrets and know-how. Any involuntary disclosure (e.g. bad actors, disgruntled employees, being hacked or simple theft) to or misappropriation by third-parties of our confidential or proprietary information could enable competitors to duplicate or surpass our technological achievements, potentially eroding our competitive position in our market. We seek to protect confidential or proprietary information in part by confidentiality agreements with our employees, consultants, and third-parties. While we require all of our employees, consultants, advisors and any third-parties who have access to our proprietary know-how, information and technology to enter into confidentiality agreements, we cannot be certain that this know-how, information and technology will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. These agreements may be terminated or breached, and we may not have adequate remedies for any such termination or breach. Furthermore, these agreements may not provide meaningful protection for our trade secrets and know-how in the event of unauthorized use or disclosure. To the extent that any of our staff were previously employed by other synthetic biology companies, those employers may allege violations of trade secrets and other similar claims in relation to their product development activities for us.

If we fail to comply with our obligations in the agreements under which we license development or commercialization rights to products or technology from third-parties, we could lose license rights that are important to our business.

We hold exclusive licenses from The Regents of the University of California, (“The Regents”), through the University of California, Los Angeles (“UCLA”), to intellectual property relating to cell-free synthetic biochemistry technology. These licenses impose various developmental milestone obligations on us. If we fail to comply with any material obligations, the licensor will have the right to terminate the applicable license. The existing or future patents to which we have rights based on our agreements with The Regents may be too narrow to prevent third-parties from developing or designing around these patents. Additionally, we may lose our rights to the patents and patent applications we license in the event of a breach or termination of the license agreement. Should the license terminate we retain the right to utilize the intellectual property but may not be able to prevent others from doing so, in which case we may lose a competitive advantage.

Our license fees to The Regents may exceed our income from product revenues based on the licensed patents.

The license we hold from The Regents provides annual license fees and royalties based on income derived from the licensed patents. It is possible that our fees to The Regents may exceed our income. In such an event, we would have to fund the fees from other sources, such as working capital, financing, or other income. If we do not make the payments, as and when required, we would be in breach of the license agreement, and The Regents would be able to terminate the license.

If we or our licensors are unable to protect our/their intellectual property, then our financial condition, results of operations and the value of our technology and products could be adversely affected.

We believe patents and other proprietary rights are essential to our business. Our success will depend in part on the ability of our licensors to obtain, to maintain (including making periodic filings and payments) and to enforce patent protection for their intellectual property, particularly those patents to which we have secured exclusive rights. We, and our licensors, may not successfully prosecute or continue to prosecute the patent applications which we have licensed. Even if patents are issued in respect of these patent applications, we or our licensors may fail to maintain these patents, may determine not to pursue litigation against entities that are infringing upon these patents, or may pursue such enforcement less aggressively than we ordinarily would. Without adequate protection for the intellectual property that we own or license, other companies might be able to use substantially identical methods of production, which could unfavorably affect our competitive business position and harm our business prospects. Even if issued, patents may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from using similar methods of production or limit the length of term of patent protection that we may have for our methods of manufacturing our products.

Litigation or third-party claims of intellectual property infringement or challenges to the validity of our patents would require us to use resources to protect our technology and may prevent or delay our development or commercialization of our product candidates.

If we are the target of claims by third parties asserting that our methods of production, enzymatic pathways or intellectual property infringe upon the rights of others, we may be forced to incur substantial expenses or divert substantial employee resources from our business. If successful, those claims could result in our having to pay substantial damages or could prevent us from developing one or more products. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

If we or our collaborators experience patent infringement claims, or if we elect to avoid potential claims others may be able to assert, we or our collaborators may choose to seek, or be required to seek, a license from the third-party and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights may be nonexclusive, which would give our competitors access to the same intellectual property. Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations if, as a result of actual or threatened patent infringement claims, we or our collaborators are unable to enter into licenses on acceptable terms. This could harm our business significantly. The cost to us of any litigation or other proceeding, regardless of its merit, even if resolved in our favor, could be substantial. Some of our competitors may be able to bear the costs of such litigation or proceedings more effectively than we can because they have greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Intellectual property litigation and other proceedings may, regardless of their merit, also absorb significant management time and employee resources.

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization activities for other products.

Although we are not currently aware of any litigation or other proceedings or third-party claims of intellectual property infringement, the synthetic biology industry is characterized by many litigation cases regarding patents and other intellectual property rights. Other parties may in the future allege that our activities infringe their patents or that we are employing their proprietary technology without authorization. We may not have identified all the patents, patent applications or published literature that affect our business either by blocking our ability to commercialize our product, by preventing the patentability of one or more aspects of our products or those of our licensors or by covering the same or similar technologies that may affect our ability to market our product. In addition, even in the absence of litigation, we may need to obtain licenses from third-parties to advance our research or allow commercialization of our product. We may fail to obtain future licenses at a reasonable cost or on reasonable terms, if at all. In that event, we may be unable to further develop and commercialize one or more of our products, which could harm our business significantly.

We may become involved in future lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or of our licensors is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.

The US Patent and Trademark Office may initiate interference proceedings to determine the priority of inventions described in or otherwise affecting our patents and patent applications or those of our collaborators or licensors. An unfavorable outcome could require us to cease using the technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if a prevailing party does not offer us a license on terms that are acceptable to us. Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distraction of our management and other employees. We may not be able to prevent, alone or with our licensors, misappropriation of our proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the US.

If trademarks and trade names are not adequately protected, then we may not be able to build name recognition in the markets of interest and our 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. We may not be able to protect our rights to our trademarks and trade names or may be forced to stop using our names. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our 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 we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, and our business may be adversely affected.

Risks Related to this Being a Public Company

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

As a public company listed in the U.S., we incur significant legal, accounting and other expenses. 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 must devote a substantial amount of time to these compliance requirements. Moreover, these rules and regulations have substantial legal and financial compliance costs and will make some activities more time-consuming and costly.

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 are 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 engage in a process to document and evaluate our internal controls over financial reporting, which is both costly and challenging. In this regard, we 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 and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our shares of Common Stock less attractive because we may rely on these exemptions. If some investors find our shares of Common Stock less attractive as a result, there may be a less active trading market for our shares of Common Stock, and our share price may be lower or more volatile.

We are a smaller reporting company within the meaning of the Securities Act, and while 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 are not required to 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.

If we fail to develop or maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent financial fraud. As a result, current and potential stockholders could lose confidence in our financial reporting.

eXoZymes is subject to the risk that it has deficiencies in its internal control structure. A deficiency in internal control over financial reporting is one that indicates there is more than a remote likelihood that a material misstatement of the entity’s financial statements will not be prevented or detected by the entity’s internal controls. Effective internal controls are necessary to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we could be subject to regulatory action or other litigation and our operating results could be harmed. Our lack of sufficient, appropriate accounting personnel is one such deficiency.

If we are unable to comply with the internal control over financial reporting requirements of the Exchange Act, then we may not be able to obtain the required independent accountant certifications, which may preclude us from keeping our filings current with the SEC. Further, a material weakness in the effectiveness of internal control over financial reporting could result in an increased chance of fraud, reduce our ability to obtain financing, and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations, and financial condition.

We currently have a single facility that is our main office and laboratory. Any disruption in our ability to operate from this facility would delay our research and development efforts and does pose an operational risk.

We rely on a single laboratory location for our operations, research, and development activities. This concentration of resources presents a significant risk to our business continuity. If our facility experiences a disruption due to natural disasters, power failures, equipment malfunctions, cyberattacks, regulatory actions, or other unforeseen events, our ability to conduct operations could be severely impacted or completely halted. Any significant downtime at our facility could lead to delays in research, product development, and service delivery, which may adversely affect our financial condition and results of operations. Additionally, customers, investors, and other stakeholders may lose confidence in our ability to provide continuous and reliable services, potentially leading to a loss of business and reputational harm.

Although, we are actively assessing risk mitigation strategies, including potential secondary locations, partnerships, and contingency planning. However, until such measures are implemented, our reliance on a single facility will continue to pose an operational risk.

Our Common Stock may experience rapid and substantial price volatility, and price decline, which may make it difficult for prospective investors to assess what we believe to be the value of our Common Stock.

In addition to the general volatility risks of the stock market, our Common Stock may be subject to rapid and substantial price volatility and/or a decline in the market price. 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 Common Stock. Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility in the stocks of emerging growth companies, especially among companies with relatively small public floats. As we anticipate having a relatively small public float, the Common Stock may experience greater stock price volatility, extreme price run-ups, rapid declines in the price, lower trading volume, large spreads in bid and asked prices, and less liquidity than large-capitalization companies. These aspects of trading in Common Stock 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 an investor would be able to sell shares if it wants to sell any shares or buy shares if it wishes.

If the trading volumes of our Common Stock are low, persons buying or selling in relatively small quantities may easily influence the prices of the Common Stock. A low volume of trades could also cause the price of the Common Stock 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 Common Stock. The volatility also could adversely affect the ability of the Company to issue additional shares of Common Stock or any 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 Common Stock will develop or be sustained.

Concentration of ownership among our existing executive officers, directors and significant stockholders may prevent new investors from influencing significant corporate decisions.

All decisions with respect to the management of the Company will be made by our board of directors and our officers. MDB Capital Holdings, LLC, as of the date of this report, beneficially owns 47.63% of our common stock. Mr. Christopher Marlett and Mr. Anthony Digiandomenico, directors of the Company, are principals of MDB Capital Holdings, LLC. Mr. Edgardo Rayo, who is an employee of Public Ventures, LLC, a wholly owned subsidiary of MDB Capital Holdings, LLC, is a director of the Company. Mr. Christopher Marlett, our Chairman of the Board is also a Director of MDB Capital Holdings, LLC and has significant voting authority over the securities owned by MDB Capital Holdings, LLC. It is expected that these persons will have aligned interests, and, therefore, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, the management team, amendment of our articles of incorporation and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of the company or changes in management, in each case, which other stockholders might find favorable, and will make the approval of certain transactions difficult or impossible without the support of these significant stockholders.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our Common Stock.

If we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements, the minimum capital requirements, or the minimum closing bid price requirement, Nasdaq may take steps to delist our Common Stock. Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

We are an “emerging growth company” under the JOBS Act and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of any June 30.

Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it.

Because of the exemptions from various reporting requirements provided to us as an “emerging growth company,” we may be less attractive to investors, and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our reporting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

We anticipate that any public market for our Common Stock will be volatile. This may affect the ability of our investors to sell their shares as well as the price at which they may be able to sell their shares.

The market price for our shares of Common Stock may be significantly affected by factors such as variations in quarterly and yearly financial operating results, general trends in the biochemistry industry, our operations and our ability to produce and commercialize products. Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations in emerging growth companies, such as the Company, that are unrelated or disproportionate to the operating performance of the affected companies. Such broad market fluctuations may adversely affect the market price of our Common Stock and adversely affect the ability of investors in the Company to buy and sell the Common Stock.

Shares eligible for future sale may adversely affect the market for our Common Stock.

Certain of our current stockholders’ holdings of our outstanding shares of Common Stock may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months’ hold and the expiration of any contractual lock up. In general, pursuant to Rule 144, affiliated stockholders may sell subject to a number of volume and method of sale limitations after six months. In addition, our largest stockholder, MDB Capital Holdings, LLC, has registration rights which will permit it to sell 4,013,769 shares freely in the public market. Any substantial sale of our Common Stock pursuant to Rule 144 or pursuant to any resale prospectus may have a material adverse effect on the market price of our Common Stock and liquidity of the market for our Common Stock.

We may have an increased risk of securities class action litigation as a result of our being a public reporting company and trading in the public market.

Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because the public securities market for small cap companies such as ours have experienced significant share volume and price volatility in recent years. If we were to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

We have not paid cash dividends in the past and have no immediate plans to pay cash dividends.

We plan to reinvest all of our earnings, to the extent we have earnings, in order to further develop our technology and potential products and to cover operating costs. We do not plan to pay any cash dividends with respect to our securities in the foreseeable future. We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our Common Stock as a dividend. Therefore, you should not expect to receive cash dividends on our outstanding Common Stock.

We have technology that might be interesting to bad actors, foreign actors or nation states that has very different legal frameworks and belief system than ours.

We will attempt to follow best business practices, at a reasonable cost level relative to our size, regarding avoiding IP theft, cyber attacks, espionage and similar impact by bad actors, foreign actors or nation states that might have very different legal frameworks, intentions and belief systems than our own, here in the US. Our defenses might be too weak, our setup wrong or simply not existing, and it may result in the Company losing competitive advantage, IP or resulting in damage, which could lead to in harm to our business, our partners, our future potential and the value of our company.

We have not had any reportable cybersecurity breaches or espionage, including what we may perceive or recognize as cybersecurity incidents, espionage or credible threats during the fiscal year ended December 31, 2025. To date, as a result, there has not been any material adverse effect on our business operations or financial condition. If there is a cybersecurity attack, espionage and/or an infiltration of our files, data, customer data and the like, there would be a material adverse effect on our business, our reputation, our operations and financial condition. For example, our reputation would be damaged in the event of cybersecurity infiltration. If there were cybersecurity infiltration, we could lose access to our data which would disrupt our operations, and we even may not be able to operate. Such a loss of access might be temporary or permanent, and it might be localized or general. The level of disruption will depend on our backup systems. Our clients’ financial and other data could be taken and used against us to damage our reputation or cause harm to our clients in different ways. In the latter instance, we may be liable for monetary damages to our clients. We may be held for cyber ransom, which would be a loss to our financial resources. Our inability to operate, payment of damages, payment of ransom, and the costs of reparation of our systems, consultants, and tangential expenses will all result in damage to our business and our financial resources.

We believe that we have implemented a comprehensive cybersecurity program aimed at identifying, monitoring, and mitigating cybersecurity risks to the best of our ability. Our security program encompasses information security responsibilities, incident response, and is diligently managed by our information technology consultants. Cybersecurity is integrated into our overall risk management framework, with consultation from our subject matter experts to assess and address potential cyber risks and their impacts.

Management is committed to providing the Audit Committee with regular cybersecurity updates, at least annually or more often as needed, based on emerging threats or specific incidents. These updates cover risk assessments, the current threat landscape, and any recent cybersecurity incidents.

The Company has retained outside consultants to assist with information technology activities and has put in place governance measures for information security with a focus on continuous improvement of its systems. This includes control requirements for change management, patching processes, the implementation of multifactor authentication, comprehensive data backup strategies, and continuous security monitoring. Additionally, management continues to enhance our security controls, with any significant issues promptly reported to the Audit Committee.

Our headquarters and R&D facilities are currently located in Monrovia, California. We lease approximately 10,000 square feet of recently renovated space. Of the total space, a portion is reserved for R&D pilot activities and the balance of the space is split among the general and administrative office, R&D laboratory requirements, fermentation uses to develop and produce needed enzymes, and to house an analytical lab. The Company believes its existing facility is in good operating condition and suitable for its future operations as of the period end December 31, 2025.

From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our customers. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Overview

eXoZymes is a biotechnology, pre-revenue, development stage company. Management believes that eXoZymes’s technology is a differentiated and unique synthetic biology platform. Management believes the platform will enable scalable production of chemical molecules found in nature in a process that is alternative to and more environmentally friendly and sustainable than the typical methods used today, such as chemical synthesis, natural extraction, and synthetic biology. eXoZymes believes its technology could significantly change biomanufacturing through leveraging cell-free, multi-step enzyme-based systems that will be able to transform natural or renewable resources into sought after chemicals. As the eXoZymes synthetic biology platform continues to develop over time, it is expected to enable the production of a diverse range of selected chemicals, including pharmaceuticals, fuels, materials, food additives, and novel compounds

Results of Operations

The Company has determined its reporting units in accordance with ASC (Accounting Standards Codification) 280, Segment Reporting. The Company has one reportable segment for eXoZymes as a whole. A single management team that reports to the Chief Executive Officer comprehensively manages the business. Accordingly, the Company does not have separate reportable segments.

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

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General and Administrative Costs.

During years ended December 31, 2025, and 2024, respectively, several factors contributed to changes in various expense categories:

• Compensation Expense: For the year ended December 31, 2025, the increase was primarily driven by the hiring of additional administrative staff whose costs were not funded by grants.
• Professional Fees: Compared to year ended December 31, 2024, the increase was primarily attributable to higher consulting costs supporting operational activities, as well as increased legal, tax, and audit fees related to financial reporting. In addition, Nasdaq and SEC compliance and filing fees increased following the 2024 IPO.
• Information Technology Costs: This increase was primarily related to additional IT projects undertaken to enhance the Company’s infrastructure and operational capabilities.
• Other General and Administrative Costs: The increase was primarily related to D&O insurance costs and director fees, which were not incurred in 2024.

Research and Development Costs.

For the year ended December 31, 2025, research and development costs increased by $1,838,225 compared to the same period in 2024, primarily due to higher salary, bonus accruals, stock-based compensation and laboratory expenses, as well as a reduction in grant funding. It is important to note that the decrease in grant funding was not attributable to any specific event.

Consolidated Balance Sheet as of December 31, 2025, and December 31, 2024

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Financial Condition:

The decrease in assets was due to changes in several asset classes, but primarily in cash and cash equivalents. The decrease in grants receivable was driven by completion of certain grants and timing of grant drawdowns. The increase in prepaid expenses was mainly explained by the increase of prepaid related to software acquisition. The decrease in property and equipment was due to the ongoing accumulated depreciation of fixed assets. The decrease in operating lease right-of-use assets resulted from the usage and payments of office space during the period.

The decrease in total liabilities was primarily attributable to the reduction of operating lease obligations and related-party debt. In contrast, accounts payable increased, driven mainly by higher supplier-financed commercial activity and the accrual of employee bonuses.

The equity decrease was due to losses generated by operations.

Liquidity and Capital Resources – December 31, 2025, and 2024

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

On December 31, 2025, the Company had working capital of $2,372,687, as compared to working capital of $9,487,137, on December 31, 2024, reflecting a decrease in working capital of $(7,114,450). This decrease in working capital was the result of usage of cash and cash equivalents to fund operations. On December 31, 2025, the Company had cash of $3,039,343 available to fund its operation.

On November 11, 2024, the Company signed a firm commitment underwriting agreement for its IPO, in which it sold an aggregate of 1,987,666 shares of Common Stock, including 112,666 shares pursuant to the underwriter overallotment option, for gross proceeds of $15,901,328, and net proceeds of approximately $15,206,543. The Company used approximately $4,243,022 to repay loans from MDB Capital Holdings, LLC shortly after the closing of the IPO. The balance of the proceeds as of December 31, 2025, will continue to be used throughout 2025, in the expansion of its production capabilities, staffing, R&D, and other working capital requirements.

In a private placement (“Concurrent Private Offering”) completed concurrently with the IPO, the Company sold to accredited investors an aggregate of 93,750 warrants to purchase up to 93,750 shares of Common Stock (the “Private Warrants”). The Private Warrants were sold at a purchase price of $0.125. The Private Warrants have an exercise price of $8.00 per share, are exercisable beginning six months after issuance, and expire five years from the date of issuance. The Private Warrants have a cashless exercise provision and registration rights for the underlying shares of Common Stock. The gross proceeds from the Concurrent Private Offering were approximately $11,719, and if the Private Warrants are fully exercised, for cash, the Company will receive up to $750,000.

In October 2024, the Company received a cost share grant from the Department of Defense (DOD) BioMADE initiative to help fund next steps toward cell-free biomanufacturing of isobutanol in the amount of approximately $1,000,000 against our own required expenses of an equal amount.

In March 2025, the Company received an additional grant in the amount of $283,805 from the National Institute of Health (NIH) BioClick. The BioClick grant focuses on a cell free high-throughput platform for engineering of enzymatic group transfer reactions. The Company intends to pursue additional grants from time to time, which if granted to the Company will further improve its working capital position.

Based on its working capital of approximately $2,372,687 as of December 31, 2025, the Company believes that there remains substantial doubt about its ability to continue as a going concern due to anticipated funding shortfalls and the Company’s pre-revenue status. The Company’s ability to meet its long-term liabilities and obligations depends on securing additional financial support, whether through continued shareholder funding, raising equity or debt financing, or ultimately achieving profitable operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Operating Activities.

For the year ended December 31, 2025, operating activities used cash of $6,502,040 primarily due to increased research and development costs and higher general and administrative expenses.

For the year ended December 31, 2024, operating activities used cash of $8,505,650, which was driven by an increased research and development activity, as well as increased general and administrative costs. Additionally, the Company paid $4,243,022 in related party loans to MDB Capital Holdings, LLC.

Investing Activities.

For the years ended December 31, 2025, and 2024, investing activities consisted of the purchase of laboratory equipment.

Financing Activities.

For the year ended December 31, 2025, the Company incurred cash payments of $27,709 related to its finance lease obligations.

For the year ended December 31, 2024, financing activities consisted of loans from a related party and the proceeds from the IPO.

Accounting Pronouncements Issued and Not Yet Adopted

ASU 2024-03

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, *Disaggregation of Income Statement Expenses (DISE) (“***ASU 2024-03”**), which requires disclosure of certain categories of expenses such as the purchase of inventory, employee compensation, depreciation, and intangible asset amortization that are components of existing expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 should be applied prospectively; however, retrospective application is permitted. We are currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

ASU 2025-11

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements (ASU 2025-11), which clarifies and improves the guidance for interim financial reporting. The amendments introduce a disclosure principle requiring entities to disclose events since the end of the previous annual reporting period that materially affect the entity, consolidate a comprehensive list of interim disclosure requirements within ASC 270, and provide guidance on the form and content of condensed interim financial statements. ASU 2025-11 will be effective for interim reporting periods in fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU 2025-11 to determine the impact it may have on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

ASU 2023-07

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures. The Company adopted ASU 2023-07 effective December 31, 2024, on a retrospective basis. The adoption of 2023-07 did not change the way that the Company identifies its reportable segments and, as a result, did not have a material impact on the Company’s segment-related disclosures.

ASU 2023-09

In December 2023, the FASB issued ASU No. 2023-09, *Improvements to Income Tax Disclosures (*ASU 2023-09), which is intended to enhance the transparency of income tax matters within consolidated financial statements, providing stakeholders with a clearer understanding of an entity’s operations and the associated tax risks. ASU 2023-09 requires public business entities to disclose, on an annual basis, specific categories in the rate of reconciliation and provide additional information for reconciling items that meet a specific quantitative threshold. There is a further requirement that public business entities will need to disclose a tabular reconciliation, using both percentages and reporting currency amounts. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 resulted in modifications to our income tax disclosures for the fiscal year ended December 31, 2025.

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 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:

Accounting for Research Grants

eXoZymes 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 as revenues to the extent of disbursements and commitments that are allowable for reimbursement of allowable expenses incurred as of December 31, 2025 and 2024 and expected to be received from funding sources in the subsequent year. Management considers such receivables on December 31, 2025 and 2024, 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 eXoZymes conducts its research activities, and eXoZymes 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. eXoZymes 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.

External Risks Associated with the Company’s Business Activities

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.

Supply Chain Issues. The Company continues to monitor changes in tariffs and indirect trade restraints. 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. Also, there is possible economic instability due to the possibility of tariffs and other economic changes due to government policy of the United States and other countries. 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.

Technology. The Company’s endeavors to create and bring new technologies to the market may never come to fruition or might not reach a level of development sufficient for commercial viability. Even if they do achieve a commercial level of development, the acceptance of these technologies within the marketplace is uncertain. There’s a possibility that the technologies they develop may not gain widespread or timely acceptance. Moreover, technologies from our Company that undergo regulatory scrutiny, testing, and approval may ultimately fail to receive the necessary approvals from relevant regulatory bodies.

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.

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, therefore we are not required to provide the information under this item.

Evaluation of Disclosure Controls and Procedures

The Company, with the participation of the Chief Executive Officer and Vice President of Finance, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, and because of the material weaknesses in internal control over financial reporting described below, the Chief Executive Officer and Vice President of Finance concluded that, as of December 31, 2025, the disclosure controls and procedures were not effective at the reasonable assurance level. In light of this fact, the Company has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in the internal control over financial reporting, the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly state, in all material respects, the financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Management’s Annual Report on Internal Control over Financial Reporting

Management holds the responsibility for preparing accurate financial statements and ensuring they faithfully represent our financial status and operations in line with generally accepted accounting principles (GAAP).

Management is also tasked with establishing and upholding sufficient internal controls over financial reporting, as stipulated in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e). These controls aim to offer reasonable assurance about the fairness of our financial reporting and the accuracy of financial information. Despite the nature of our internal control systems, they are subject to inherent limitations, including human error and the potential bypassing of controls, thus providing only reasonable—not absolute—assurance.

Our internal controls over financial reporting encompasses procedures for maintaining detailed records that reflect our transactions accurately, ensuring transactions are recorded as needed for financial statement preparation in compliance with GAAP, and safeguarding company assets through authorized management and director actions.

After an evaluation led by our Chief Executive Officer and Vice President of Finance, based on the COSO 2013 framework, we identified material weaknesses in our internal controls as of December 31, 2025. These material weaknesses are described below:

Inadequate Design of Policies and Procedures: We did not document adequately the policies and procedures at a sufficient level of precision to support the operating effectiveness of control. We are committed to continuously evaluating and improving our internal control over financial reporting and will implement further enhancements as necessary and financially viable.

Testing of Internal Controls: Inadequate procedures related to testing of implemented procedures around internal control. Improvements to mitigate this weakness will be implemented further as necessary.

This Annual Report on Form 10-K does not include an attestation from our public accounting firm regarding internal control over financial reporting, following SEC rules that allow us to present only management’s report

Changes in Internal Control over Financial Reporting

Other than the material weakness remediation efforts underway, there were no changes in the internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls and Procedures

The Company’s management, including the Chief Executive Officer and Vice President of Finance, believes that disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, management does not expect that the disclosure controls and procedures or internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.