EXOZYMES INC. 10-K

Item 1. Business 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. 4 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). 5 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. 6 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. 7 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. 8 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. 9 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. 10 ● 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. 11 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. 12 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. 13 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. 14 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.