EXOZYMES INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company, with the participation of the Chief Executive Officer and VP 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 VP of Finance concluded that, as of December 31, 2024, 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. 34 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). We are 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 encompass 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 VP of Finance, based on the COSO 2013 framework, we identified material weaknesses in our internal controls in our prior year, as of December 31, 2024. 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 Apart from the remediation efforts mentioned earlier, no changes were made to our internal control over financial reporting in 2024 that have had, or are expected to have, a material impact on its effectiveness. Inherent Limitations on Effectiveness of Controls and Procedures The Company’s management, including the Chief Executive Officer and VP 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 the 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. Item 9B. Other Information None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable 35 PART III Item 10. Directors, Executive Officers and Corporate Governance Set forth below are our directors and officers: Name Age Position Michael Heltzen 44 President and Chief Executive Officer Fouad Nawaz 39 Vice President, Finance Tyler Korman 46 Vice President, Research Paul Opgenorth 42 Vice President, Development Christopher A. Marlett 60 Chairman of the Board and Director Anthony DiGiandomenico 58 Director James U. Bowie 65 Director James J. Lalonde 64 Director Lon E. Bell 84 Director Edgardo Rayo (2) 38 Director (1) Edgardo Rayo was appointed to the board as a Director on February 17,2025 Michael Heltzen. Mr. Heltzen has served as the Chief Executive Officer of the Company since February 1, 2024 and previously served as the Chief Strategy Officer of the Company from October 2023 to January 2024.Mr. Heltzen was appointed to position of President on February 17, 2025. Prior to joining the Company, Mr. Heltzen held the position of Executive Vice President for Strategy at Paragraf Ltd. from May 2023 to October 2023. From January 2019 to May 2023 Mr. Heltzen served as the Chief Executive Officer of Cardea Bio Inc. Mr. Heltzen also served as the Chief Executive Officer and Chairman of Nanosens Innovations Inc., prior to its merger with Cardea Bio Inc., from December 2018 to September 2019. Mr. Heltzen has also served as the Chairman of the Board for EXO Incubator Inc. since 2015 and Chairman of the Board for Blue SEQ Innovations Inc. since 2010. Fouad Nawaz. Mr. Nawaz has served as the Vice President Finance of the Company since September 2023. Prior to joining the Company, Mr. Nawaz served as the Vice President of Finance at Fulham Co Inc. from June 2018 to September 2023. Mr. Nawaz received his Bachelor of Science degree in 2007 in Business administration from California State University, Long Beach. Tyler Korman, PhD. Dr. Korman has served as Vice President of Research effective as of February 1, 2024 and previously served as Director of Research and Development of the Company from August 2019 to January 2024. From June 2014 to September 2019 Dr. Korman was a Project Scientist in the Department of Chemistry and Biochemistry at the University of California, Los Angeles. Dr. Korman received his PhD in Molecular Biology and Biochemistry from the University of California, Irvine in 2008, Master of Science in 2003 and Bachelor of Science in 2001 in Chemistry from the University of California, San Diego. Paul Opgenorth, PhD. Dr. Opgenorth has served as Vice President of Development effective as of February 1, 2024 and previously served as Director of Research and Development of the Company from August 2019 to January 2024. From May 2017 to August 2019 Dr. Opgenorth was a postdoctoral scientist in the Joint BioEnergy Institute at Lawrence Berkeley National Lab. Dr. Opgenorth received his PhD in Chemistry, Biochemistry, and Structural Biology from the University of California, Los Angeles in 2015, and Bachelor of Science in 2004 in Chemistry from the University of California, Davis. 36 James U. Bowie, PhD. Dr. Bowie has served as a director of the Company since its inception in April 2019. Dr. Bowie has been on the faculty in the Department of Chemistry and Biochemistry at the University of California, Los Angeles since 1993 and served as Associate Director of the UCLA-DOE Institute from 2002 to June 2019 and Vice Chair from 2012 through June 2019. He became Professor Emeritus in June 2021. Dr. Bowie served on the Editorial Boards of four academic journals, organized many international meetings and served on numerous national and international scientific committees, including service as President of the Protein Society from 2013 to 2015. Dr. Bowie obtained a B.A. with Distinction in Chemistry from Carleton College in 1981, a Ph.D. in Biochemistry from the Massachusetts Institute of Technology in 1989 and did postdoctoral work at the University of California, Los Angeles from 1989 to 1993. His work has been cited over 29,000 times and has been recognized with many awards, including being named Fellow of the Biophysical Society and Fellow of the American Association for the Advancement of Science. Throughout his career, Dr. Bowie’s work has focused on issues related to protein and enzyme structure. He holds patents on drug screening technology, methods for protein structure prediction, and for enzyme system design. The Board believes that Dr. Bowie’s intimate knowledge of eXoZymes’s foundational enzyme technology will be highly valuable to our Board’s deliberations and oversight of Company strategies. Christopher Marlett . Mr. Marlett has served as a director of the Company since its inception in April 2019. Mr. Marlett has been the chief executive officer and chairman of the board of directors and a director of MDB Capital Holdings, LLC since inception on August 10, 2021.The Company appointed Mr. Marlett as Chairman of the board on February 17, 2025. Mr. Marlett has been since 1997, the Chief Executive Officer and a co-founder of MDB Capital (formerly known as MDB Capital Group, LLC). Over his 36 years of working in the securities industry, he has led multiple financings for venture stage public companies and has dedicated his efforts to optimizing this method to launch promising technology/business platforms. He has been integral in co-founding and developing the commercialization and financing strategy for all the companies MDB has taken public. In addition, he has served as a board member of several of the public companies in the early stages. He has invested significant efforts in developing a human capital development platform in Nicaragua that has led to the creation of the largest call center park in the country employing approximately 3,000 people and several knowledge process outsourcing operations to support MDB’s businesses. He developed the first patent services company in Nicaragua that was sold to Murgitroyd an LSE-listed patent attorney and services platform. He is the co-founder of PatentVest and developed the platform from inception in 2003. He holds a Bachelor of Science degree in Business Administration from the University of Southern California. Mr. Marlett’s leadership and extensive corporate and financial experience position him well to serve as a member of our board of directors. Anthony DiGiandomenico . Mr. DiGiandomenico has served as a director of the Company since its inception in April 2019. Mr. DiGiandomenico has been the Chief of Transactions and director of MDB Capital Holdings, LLC since inception on August 10, 2021. Mr. DiGiandomenico has also served on the board of directors of ENDRA Life Sciences Inc. (Nasdaq: NDRA), a developer of enhanced ultrasound technology, from July 2013 until present, the board of directors of Provention Bio, Inc., a developer of multiple drug therapies, from January 2017 until May 2020 and the board of directors of Cue Biopharma, Inc., that develops novel biologic drugs for the selective modulation of the human immune system to treat a broad range of cancers and autoimmune disorders from January 2016 to October 2019. Since he co-founded MDB Capital Holdings, LLC (formerly known as MDB Capital Group, LLC) in 1997, Mr. DiGiandomenico has been enabling investment into early-stage disruptive technologies. He has worked alongside a wide range of companies in biotechnology, medical devices, high technology, and renewable energy spaces. Mr. DiGiandomenico holds an MBA from the Haas School of Business at the University of California, Berkeley and a BS in Finance from the University of Colorado. Mr. DiGiandomenico’ s extensive financial and investment banking expertise, general business acumen and significant executive leadership experience position him well to make valuable contributions to our board of directors. 37 James J. Lalonde . Dr. Lalonde has served as an independent director of the Company since April 1, 2024. Dr. Lalonde is a recognized leader in the field of synthetic biology and serves as an Scientific Advisor for several private start-up enterprises and since August 2023 has been the Chairman of the Board at Willow Biosciences Inc. He previously served as Lead, Microbial Digital Genome Engineering Business with Inscripta Inc. from September 2019 to August 2021, a global leader in genome engineering technology, as Lead of its Microbial Digital Genome Engineering Business. Prior to that, from 2004 to 2019 Dr. Lalonde was Senior Vice President of R&D at Codexis, Inc., a leader in protein engineering. In his nearly 15 years at Codexis he oversaw development of more than 50 enzymes for drug manufacturing, nutrition, biotherapeutics, and molecular diagnostics. He also led development of the company’s pioneering CodeEvolver ® protein engineering technology which was licensed to major pharmaceutical companies. Prior to Codexis, Dr. Lalonde held leadership roles in biocatalysis and chemical development at Altus Biologics from 1993 to 2004 and in scientific research from 1989 to 1993 at Vista Chemical Company. He holds a bachelor’s degree in chemistry from Lakehead University (1983) and a Ph.D. in organic chemistry from Texas A&M University (1987). He was a recipient of the US Presidential Green Chemistry Awards twice and was elected to the Academy of Distinguished Alumni at Texas A&M in 2022. The Board believes that Dr. Lalonde’s extensive scientific background, which includes experience of synthetic biology, genome engineering and protein engineering, and his participation in start up enterprise management, qualifies him to be a member of our Board. Lon Edward Bell, PhD . Effective April 1, 2024 Dr. Bell joined the Board of Directors of the Company as an independent board member. Dr. Bell founded DTP Thermoelectrics LLC in 2021 and serves as its CEO. The company is focused on commercializing a new generation of solid-state heating, cooling and temperature control systems. Dr. Bell served as a board member from 2013 to 2016 and since 2017 has served as Chairman of CDTi Advanced Materials, Inc., a publicly traded company (CDTI: Pink Sheet). Dr Bell helped guide CDTI through a pivot to become an emerging developer of catalytic coating systems for the chemical reforming industry serving the emerging hydrogen economy and hydrocarbon sequestering industries. Since 2008 Dr. Bell has served as a member of the advisory board for the California Institute of Technology’s Department of Mechanical and Civil Engineering, serving as the Chair from 2015 to 2022. Dr Bell’s notable prior experiences include the founding of Amerigon (now Gentherm Incorporated, NASDAQ: THRM) in 1991, which has become a major supplier of solid-state thermal management systems to the automotive industry. Previously he founded Technar, Incorporated, in 1968, a pioneering supplier of automotive crash sensors to the automobile industry. He guided the company from its inception to its sale to TRW in 1991. Throughout his career, Dr. Bell has been granted over 100 patents for his inventions. Five clusters of his inventions have gone into mass production and achieved a significant share of their target markets. Dr. Bell has a bachelor’s degree in mathematics (1962), master’s degree in rocket propulsion (1963), and PhD in mechanical engineering (1968), from the California Institute of Technology. The Board believes that Dr. Bell’s educational attainments, management and leadership experience, entrepreneurial understanding and service on boards of other public companies, qualifies him to serve as a member of our Board. Edgardo Rayo has been employed by MDB Capital, S.A, since 2013, which is an affiliated company of MDB Capital Holdings, LLC. Mr. Rayo also is a registered representative of MDB Capital, a registered broker-dealer,subsidiary of MDB Capital Holdings, LLC. Mr. Rayo, at MDB Capital, S.A., currently serves as the Director of Investment Analysis. In this role, Mr. Rayo leads the MDB Capital’s investment analysis efforts at MDB Capital, providing strategic insights that inform investment decisions and helping to drive MDB Capital’s capital-raising initiatives. Under this role, he has collaborated with a diverse array of companies across sectors such as biotechnology, medical devices, and renewable energy. Prior to joining MDB Capital, Mr. Rayo was employed at Banpro, a commercial bank, where he managed a portfolio of fixed income securities. Mr. Rayo earned a bachelor’s degree in business administration with a concentration in Finance and Economics from the Latin American campus of Ave Maria University and is a CFA Charterholder. The Board believes that Mr. Rayo’s background in investment banking, strategic business assessment and business analysis qualifies him to serve as a member of the Board. 38 Other Senior Officers Zachary Karl, PhD. Dr. Karl has served as the Vice President and Head of Business Development for the Company since September 2023, spearheading the company’s growth trajectories and strategic partnerships in synthetic biology. Prior to joining the Company, Dr. Karl held the role of Director of Business Development at Ginkgo Bioworks from July 2022 to September 2023 where he cultivated strategic opportunities to expand the company’s synthetic biology outreach. Demonstrating his entrepreneurial acumen, he founded Ambedo in 2019 and later established TerraBite Farms in 2020, where he served as the Chief Executive Officer for both and helped to bridge termite biology with industrial innovation. His tenure at SAB Biotherapeutics from January 2021 to July 2022 saw him directing the development of a range of antigens, most notably for pathogens like COVID-19. Before this, at POET, LLC, Dr. Karl melded biochemistry research with business strategy from November 2014 to April 2020, championing innovation across diverse industry collaborations. Dr. Karl received his Ph.D. in Biochemistry and Molecular in 2013 from Purdue University and a Bachelor’s in Pre-Medicine and Microbiology from Wittenberg University in 2008. Board Composition/Committees Our board of directors currently consists of six persons. The board of directors may establish the number of persons serving on the board of directors from time to time by resolution. Currently, Messrs. Bowie, Lalonde, and Bell are independent directors within the meaning of Nasdaq’s rules. Mr. Bell is a “financial expert” as that term is defined in SEC regulations. The board of directors plans to add one or more independent directors in due course to satisfy the requirements for listing on a national exchange. The board of directors will also establish various committees from time to time. It currently has the following committees: (i) audit committee, (ii) compensation committee, and (iii) nominations committee. The members of each committee are as follows: (i) audit committee – Messrs. Bowie, Lalonde, and Bell, (ii) compensation committee - Messrs. Bowie, Lalonde, and Bell, and (iii) nominations committee - Messrs. Bowie, Lalonde, and Bell. Each member of the above committees is an independent member of the board of directors. 39 Audit Committee We have established an audit committee. The audit committee will be responsible for, among other things: (i) retaining and overseeing our independent accountants; (ii) assisting the board of directors in its oversight of the integrity of our financial statements, the qualifications, independence and performance of our independent auditors; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing with our chief executive officer and chief financial officer (or VP of Finance, as the case may be) and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee’s performance and the adequacy of its charter. The audit committee will also review and approve all transactions with affiliated parties. Our board of directors has adopted a written charter for the audit committee, which is available on our website. Compensation Committee We have established a compensation committee. The committee’s primary responsibilities include approving corporate goals and objectives relevant to executive officer compensation and evaluate executive officer performance in light of those goals and objectives, determining and approving executive officer compensation, including base salary and incentive awards, making recommendations to the board of directors regarding compensation plans, and administering our stock plan. The compensation committee determines and approves all elements of executive officer compensation. It also provides recommendations to the board of directors with respect to non-employee director compensation. The compensation committee may not delegate its authority to any other person, other than to a subcommittee thereof. The Company compensation policies for executive officers has two fundamental objectives: (i) to provide a competitive total compensation package that enables the Company to attract and retain highly qualified executives with the skills and experience required for the achievement of business goals; and (ii) to align certain compensation elements with the Company’s annual performance goals. With respect to each of the Company’s executive officers, the total compensation that may be awarded, including base salary, discretionary cash bonuses, annual stock incentive awards, stock options, restricted stock units and other equity awards, and other benefits and perquisites will be evaluated by the committee. Under certain circumstances, the committee may also award compensation payable upon termination of the executive officer under an employment agreement or severance agreement (if applicable). The Board recognizes that its overall goal is to award compensation that is reasonable when all elements of potential compensation are considered. The committee believes that cash compensation in the form of base salary and discretionary cash bonuses provides our executives with short-term rewards for success in operations, and that long-term compensation through the award of stock options, restricted stock units and other equity awards aligns the objectives of management with those of our stockholders with respect to long-term performance and success. The Board also has historically focused on the Company’s financial condition when making compensation decisions and approving performance objectives and compensation has been weighted more heavily toward equity-based compensation. The committee will continue to periodically reassess the appropriate weighting of cash and equity compensation in light of the Company’s expenditures in connection with commercial operations and its cash resources and working capital needs. 40 Nominating Committee We have established a nominating committee. The committee’s primary responsibilities include identifying individuals qualified to serve on the board of directors and its committees, establishing procedures for evaluating the suitability of potential director nominees consistent with the criteria approved by the board of directors, reviewing the suitability for continued service as a director when his or her term expires and at such other times as the committee deems necessary or appropriate, and determining whether or not the director should be re-nominated, and reviewing the membership of the board of directors and its committees and recommending making changes, if any. In evaluating director nominees, then nominating committee will generally consider the following factors: ● the appropriate size and composition of our board of directors; ● whether or not the person is an “independent” director as defined in Rule 5605(a)(2) promulgated by the Nasdaq Stock Market; ● the needs of the Company with respect to the particular talents and experience of its directors; ● the knowledge, skills and experience of nominees in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the board of directors; ● familiarity with national and international business matters and the requirements of the industry in which we operate; ● experience with accounting rules and practices; ● the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members; and ● all applicable laws, rules, regulations and listing standards, if applicable. There are no stated minimum criteria for director nominees, although the committee may consider such factors as it may deem are in the best interests of the Company and its stockholders. The nominating committee also believes it is appropriate for certain key members of our management to participate as members of the board of directors. The nominating committee identifies nominees by first evaluating the current members of the board of directors willing to continue in service. Current members of the board of directors with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the board of directors with that of obtaining a new perspective. If any member of the board of directors does not wish to continue in service, or if the nominating committee decides not to re-nominate a member for re-election, the committee identifies the desired skills and experience of a prospective director nominee in light of the criteria above, or determines to reduce the size of the board of directors. Research may also be performed to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, nor do we anticipate doing so in the future. Board’s Role in Risk Oversight Our board of directors is primarily responsible for overseeing our risk management processes. Our board of directors, as a whole, determines our appropriate level of risk, assesses the specific risks that we face, and reviews management’s strategies for adequately mitigating and managing the identified risks. Although our board of directors administers this risk management oversight function, one or more committees of our board of directors may support our board of directors in discharging its obligations. For example, the audit committee reviews our major financial risk exposures and the steps management has taken to monitor and control such exposures and it will reviews matters relating to legal compliance that have a material effect on the Company financial statements and certain other limited areas of governance and will report to our board of directors regarding such matters. Code of Business Conduct and Ethics Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors. The full text of our code of business conduct and ethics will be posted on the Investor Relations section of our website. The reference to our website address does not include or incorporate by reference the information on our website into this report or any other filed document with the SEC. We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of these provisions, on our website or in public filings. 41 Clawback Policy Our board of directors has adopted a written policy to recover “excess” compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure. The compensation includes both cash-based and equity-based incentives. The compensation covered includes incentive awards awarded to any individuals (including former employees) who served as an executive officer during the three most recently completed fiscal years preceding the date on which the preparation of an accounting restatement is required, provided that the executive officers were awarded more incentive awards than they would have received if the financial statements had been prepared correctly. The recovery will include an executive incentive award even if the executive was not involved in preparing the financial statements or did not commit misconduct that led to the restatement. Restatements attributable to an inadvertent error also will subject executive officers to the recovery of previously received incentive awards. We do not intend to pay persons a director fee for serving on the board of directors who are also paid a salary or similar compensation by the Company. To the extent that we have any independent directors, the board of directors will determine their compensation at the time of their appointment and thereafter. We do not have any defined compensation plans for our officers or directors. We may adopt one or more forms of compensation arrangements, including cash and stock-based compensation arrangements in the future. Any stock-based compensation plans will be subject to the approval of the holders of the shares of Common Stock as required by the listing rules of Nasdaq and any other applicable laws. We also will reimburse any persons that are independent members of our board of directors for their reasonable expenses incurred in connection with attending meetings of our board of directors, committee meetings and other activities they undertake on our behalf and on behalf of our subsidiaries and partner companies. Compensation of Members of Board of Directors The following table sets forth the compensation earned by or awarded or paid in 2024 and 2023 to the individuals who served as our independent directors during such period: Name Year Fee Bonus Shares Options Awards Nonequity Incentive Plan Compensation Nonqualified Deferred Compensation Earnings All Other Compensation Total Mohammad “Mo” Hayat (1) 2024 - - Mohammad “Mo” Hayat (1) 2023 - - Anthony DiGiandomenico 2024 - - Anthony DiGiandomenico 2023 - - Christopher A. Marlett 2024 - - Christopher A. Marlett 2023 - - James J. Lalonde 2024 8,333 - - 51,939 James J. Lalonde 2023 - James U. Bowie 2024 - - - James U. Bowie 2023 - - - Lon E. Bell 2024 8,333 - - 51,939 Lon E. Bell 2023 - - - (1) Mr. Mo Hayat resigned as a director February 17, 2025. 42 We do not intend to pay persons a director fee for serving on the board of directors who are also paid a salary or similar compensation by the Company. To the extent that we have any independent directors, the board of directors will determine their compensation at the time of their appointment and thereafter. We do not have any defined compensation plans for our officers or directors. We may adopt one or more forms of compensation arrangements, including cash and stock-based compensation arrangements in the future. Any stock-based compensation plans will be subject to the approval of the holders of the shares of Common Stock as required by the listing rules of Nasdaq and any other applicable laws. We reimburse any persons that are independent members of our board of directors for their reasonable expenses incurred in connection with attending meetings of our board of directors, committee meetings and other activities they undertake on our behalf and on behalf of our subsidiaries and partner companies. Limitation of Liability of Directors and Indemnification of Directors and Officers The Company provides indemnification to each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer or is or was serving at the request of the Company as a director or officer of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans against all expenses, liability, and loss. The board of directors may authorize the advance of expenses in connection with any proceeding where the person is entitled to indemnification. The Company may purchase and maintain insurance to protect itself and any director, officer, employee or other agent against any expense, whether or not the Company would have the power to indemnify the person. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Indemnification Agreements We enter into indemnification agreements with each of the persons serving on the board of directors and executive officers. The indemnification agreements provide for indemnification against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee in connection with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations. The indemnification agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment or other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee is ultimately found not to be entitled to indemnification by us. The indemnification agreement sets forth procedures for making and responding to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between us and an indemnitee arising under the indemnification agreements. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our executive officers, directors and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports filed by such persons. 43 Based solely on our review of the copies of reports furnished to us, we believe that during the fiscal year ended December 31, 2024, all executive officers, directors and greater than 10% beneficial owners of our Common Stock complied with the reporting requirements of Section 16(a) of the Exchange Act, although Mr. Opgenorth, MDB Capital Holdings, LLC, Mr. Heltzen and Mr. Bell were late on filing their initial Form 4 reports due upon vesting of certain securities as a result of the initial public offering of the Company, and Mr. Bell, due to a delay in obtaining an Edgar identification number, was late on filing his initial Form 3 report. Item 11. Executive Compensation Executive Compensation This section provides an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive officer and our next two most highly compensated executive officers in respect of their service to our company during the years ended December 31, 2023, and 2024. The amounts indicated for the year ending December 31, 2024, do not include any amounts that may be awarded in 2025 as bonus compensation. We refer to these individuals as our named executive officers. The compensation information disclosed herein for our three named executive officers is disclosed in accordance with SEC requirements; such disclosure does not include the compensation for our other executive officers. Our named executive officers for the years ended December 31, 2023 and 2024 respectively, are: Name Year Salary ($) Bonus (1) ($) Stock Awards ($) Options Awards ($) RSU Awards ($) Nonequity Incentive Plan Compensa-tion ($) Nonqualified Deferred Compensa-tion Earnings ($) All Other Compensa-tion ($) Total ($) Mohammad Hayat, Chairman and CEO (2) 2024 $ - $ - $ - $ 152,078 $ - $ - $ - $ - $ 152,078 2023 $ - $ - $ - $ 152,078 $ 125,318 $ - $ - $ - $ 277,396 Michael Heltzen, President and CEO 2024 231,250 40,000 - 110,028 - - - - 381,278 2023 50,313 - - - - - - - 50,313 Tyler Korman, VP of Research 2024 191,220 54,450 - 20,279 - - - - 265,949 2023 165,000 - - 20,276 75,191 - - - 260,467 Paul Opgenorth, VP of Product Development 2024 190,000 52,800 - 19,011 - - - - 261,811 2023 160,000 - - 19,009 72,683 - - - 251,692 Fouad Nawaz, VP of Finance 2024 168,750 15,000 - 29,340 - - - - 213,090 2023 40,625 - - - - - - - 40,625 (1) The “Bonus” column represents discretionary bonuses earned pursuant to our annual incentive bonus program. (2) Mr. Hayat ceased being the CEO on February 1, 2024, and became the Chairman and President commencing February 1, 2024, upon the appointment of Michael Heltzen as the CEO on February 1, 2024. Mr. Hayat resigned as Chairman and President as of February 17, 2025. Mr. Heltzen is employed at an annual salary of $250,000 and is entitled to a cash bonus of up to 100% of the then annual base salary. He has been granted two options, one for 311,636 shares and an incentive option for 22,097, both of which vest over a five-year period. 44 Options Exercisable as of December 31, 2024 Option Awards(1) Stock Awards(2) Number of Securities Underlying Unexercised Options Number of Securities Underlying Unexercised Options Option Exercise Option Number of Shares or Units of Stock That Have Market Value of Shares or Units That Have Grant (#) (#) Price Expiration Vested Vested Name Date Exercisable Unexercisable ($) Date (#) ($) Mohammad Hayat, Chairman and CEO (3) 2/1/2021 244,115 67,521 2.44 1/31/2028 $ - 7/19/2021 - - 2.44 7/17/2031 82,118 200,368 3/28/2022 - - 2.44 3/25/2032 102,647 250,457 5/1/2023 - - 3.31 4/28/2033 37,747 125,318 Michael Heltzen, President and CEO 11/1/2023 33,241 122,577 3.31 8/31/2031 $ - 2/1/2024 - 155,818 3.31 1/31/2032 4/12/2024 - 22,097 8.00 3/31/2031 Tyler Korman, VP of Research 2/1/2021 32,549 9,003 2.44 1/31/2028 - - 3/28/2022 - - 2.44 3/25/2032 56,456 137,753 5/1/2023 - - 3.31 4/28/2033 22,648 75,191 Paul Opgenorth, VP of Product Development 2/1/2021 30,515 8,440 2.44 1/31/2028 - - 3/28/2022 - - 2.44 3/25/2032 52,720 128,636 5/1/2023 - - 3.31 4/28/2033 21,893 72,683 Fouad Nawaz, VP of Finance 11/1/2023 8,864 32,688 3.31 8/31/2031 - - 6/1/2024 - 20,776 8.00 3/31/2031 - - (1) Each equity award is subject to the terms of our 2020 Equity Incentive Plan. (2) All RSU are fully vested and remain outstanding. (3) Mr. Hayat ceased being the CEO on February 1, 2024, and became the Chairman and President commencing February 1, 2024, upon the appointment of Michael Heltzen as the CEO on February 1, 2024. Mr. Hayat resigned as Chairman and President as of February 17, 2025. 45 Equity Compensation From time to time, in addition to the cash compensation, we grant equity based awards to our named executive officers, which are generally subject to vesting based on each of our named executive officer’s continued service with us. (See table of exercisable options above.) Equity Incentive Plan The Company adopted an equity incentive award plan, the 2020 Equity Incentive Award Plan, that permits it to grant directors, officers, employees and others that contribute to the success of the Company stock options, restricted stock, restricted share units, deferred stock and other equity-based awards. The ultimate value of these various awards is dependent on increases in our share of Common Stock price. Awards are granted to provide the holder of an award with a personal financial interest in our long-term success, encourage retention through vesting provisions and enable us to compete for the services of employees in an extremely competitive market and industry. Objectives of the long-term incentive portion of our compensation package includes aligning the personal and financial interests of management and other employees with shareholder interests; balancing short-term decision-making with a focus on improving shareholder value over the long-term; and providing a means to attract, reward and retain a skilled management team. The 2020 Equity Incentive Award Plan provides for award grants of up to 2,497,008 shares of Common Stock. As of December 31, 2024, there were 7,541 shares converted and there were 2,172,445 shares of Common Stock committed under awards subject to the plan. Shareholder approval is required for the plan to comply with certain IRS and Nasdaq requirements. Both the board of directors and shareholders have approved the plan. The board of directors may grant awards under the plan for up to ten years from the date of plan adoption. The board of directors or a committee thereof will determine the form of award and its terms, such as the vesting period, the exercise period, any vesting criteria that might include performance goals and termination provisions. Typically, termination will be as a result of retirement, disability and the end of employment. Awards may not be issued at less than the fair market value of a share of Common Stock at the time of award. Although awards are typically exercised for a cash payment, the board of directors or applicable committee may issue the awards on a net exercise, or cashless, basis. Management makes recommendations to the board of directors or committee about the form of the award, the amount of the award levels and its terms. Management monitors overhang (a measure of potential earnings dilution from stock awards) as well as run rate (the rate at which stock awards are being awarded from our equity plans) when making recommendations to the board of directors or applicable committee regarding plan awards. Currently, the plan is not registered under a Form S-8 registration statement. A Form S-8 registration statement for the plan can only be filed once the Company becomes a registrant under the Securities Act or the Exchange Act and meets the criteria for use of a registration statement that incorporates certain information by reference. Until registration, any share of Common Stock issued pursuant under the plan will be “restricted stock.” Employment Agreement Michael Heltzen, our Chief Executive Officer, is employed under an employment agreement, on an at-will basis. Mr. Heltzen is paid an annual base salary of $250,000 and will be paid an annual bonus of up to 100% the amount of the then base salary. One third of the bonus is fully discretionary as determined by the board of directors and the balance is subject to meeting key performance indicators based on the overall performance of the Company and personal performance as determined annually by the board of directors in consultation with Mr. Heltzen. In addition, Mr. Heltzen initially was granted at the time of his initial employment an option to acquire up to 311,636 shares of common stock that vests over a five-year period, based on his continued employment with the Company as of the applicable vesting date, and on April 12, 2024 was granted a separate incentive option to acquire up to 22,097 shares of common stock which vest over a five year period, based on his continued employment with the Company as of the applicable vesting date. Mr. Heltzen, and his family, will be entitled to participate in all of the Company’s executive benefit plans that may be established from time to time, including, without limitation, any 401(k) and cafeteria plans, health, hospitalization, medical insurance, dental and disability programs. Mr. Heltzen will be reimbursed for ordinary business expenses. The employment can be terminated for cause, which is defined in the employment agreement, but if it is not terminated for cause, then the Company will pay a severance equal to nine months base salary and reimbursement for COBRA payments. The agreement provides for typical indemnification for acts undertaken for the Company during the employment period. 46 Outstanding Equity Awards Under Plan as of December 31, 2024 The Company has issued RSU’s to employees for an aggregate of 424,656 shares of common stock. As of December 31, 2024 all outstanding RSU’s have vested and will convert to shares of common stock at the expiration of the lockup agreement on November 11, 2025. The Company has issued Options to its key employees for an aggregate of 1,747,789 shares of common stock. These awards were issued pursuant to the eXoZymes’ 2020 Equity Incentive Plan (the “2020 Plan”). These awards generally vest on a monthly or quarterly basis. Certain employees have a one year cliff vesting for their first year of vesting. The vesting for the balance of the cliff vesting is over 5 years with a contract life of 7 years. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth information regarding the beneficial ownership of our Common Stock by: ● each shareholder of our Common Stock who is known by us to beneficially own 5% or more of our Common Stock; ● each of our executive officers; ● each of the members of the board of directors; and ● all of the members of the board of directors and current executive officers as a group. Beneficial ownership is determined based on the rules and regulations of the SEC as defined in Rule 13d-3 of the Exchange Act. A person has beneficial ownership of a share of Common Stock if such individual has the power to vote and/or dispose of the shares. This power may be sole or shared and direct or indirect. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares that are subject to options or warrants held by that person and exercisable as of, or within 60 days of, the initial closing are counted as outstanding. These shares, however, are not counted as outstanding for the purposes of computing the percentage ownership of any other person(s). Except as may be indicated in the footnotes to this table and pursuant to applicable community property laws, each person named in the table has sole voting and dispositive power with respect to the number of shares of Common Stock set forth opposite that person’s name. Unless indicated below, the address of each individual listed below is c/o eXoZymes Inc., 750 Royal Oaks Drive, Suite 106, Monrovia, CA 91016. Applicable percentage ownership in the following table is based on 8,367,810 shares of Common Stock issued and outstanding as of March 31, 2025. 47 Common Stock Name of Beneficial Owner Number of Shares Owned Beneficially (1) Percentage of Class (2) Directors Christopher A. Marlett (3) 4,158,068 48.38 % Anthony DiGiandomenico (3) 4,158,068 48.38 % James U Bowie (4) 599,552 7.15 % Edgardo Rayo (5) 77,909 0.93 % James J. Lalonde - 0.0 % Lon Edward Bell - 0.0 % Executive Officers who are not Directors Michael Heltzen (6) 85,700 0.96 % Fouad Nawaz (7) 13,158 0.15 % Tyler Korman (8) 756,928 9.01 % Paul Opgenorth (9) 672,967 8.01 % Executive Officers and Directors as a Group (10 Persons) 6,364,282 70.94 % Five Percent Ownership MDB Capital Holdings, LLC (11) 4,136,426 48.25 % * Less than 0.1% (1) Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. (2) Based on a total of 8,367,810 shares of Common Stock issued and outstanding as of March 31, 2025. (3) Includes (i) 3,931,133 issued and outstanding shares of Common Stock, (ii) 205,293 shares of Common Stock underlying a previously issued warrant, all of which 4,136,426 shares of Common Stock are held by MDB Capital Holdings, LLC over which the individual has voting and dispositive authority, and also includes (iv) 21,642 shares subject to currently exercisable options. (See footnote 12.) (4) Includes 577,910 issued and outstanding shares and 21,642 shares subject to currently exercisable options and excludes 4,328 shares subject to options that vest in the future. (5) Includes 77,909 issued and outstanding shares of Common Stock. (6) Includes 85,700 shares subject to currently exercisable options and 248,033 shares subject to options that vest in the future. (7) Includes 13,158 shares subject to currently exercisable options and 49,170 shares subject to options that vest in the future. (8) Includes 722,301 issued and outstanding shares and 34,627 shares subject to currently exercisable options. Excludes 79,104 shares subject to restricted stock units that vest in the future and 6,925 shares subject to options that vest in the future. (9) Includes (i) 640,504 issued and outstanding shares, (ii) 32,463 shares subject to currently exercisable options. Excludes 74,613 shares subject to restricted stock units that vest in the future and 6,492 shares subject to options that vest in the future. (10) See footnotes 4 - 10 above. (11) Includes (i) 3,931,133 issued and outstanding shares of Common Stock held, (ii) and (iii) 205,293 shares of Common Stock underlying a previously issued warrant, all of which 4,136,426 shares of Common Stock are held by MDB Capital Holdings, LLC. Messrs. Christopher A. Marlett and Anthony DiGiandomenico have the voting and dispositive authority over the shares of Common Stock of the Company. The address of MDB Capital Holdings, LLC, and the business address of Messrs. Marlett and DiGiandomenico is 14135 Midway Road, Suite G-150, Addison, TX 75001. 48 Item 13. Certain Relationships and Related Transactions, and Director Independence Related Party Transaction As of November 11, 2024, MDB Capital Holdings, LLC had advanced $4,386,588 to the Company. The advances included amounts paid on behalf of the Company and loans for operations. The loans for operations were undocumented and totaled $4,136,968 as of November 11, 2024, and by intercompany agreement the principal bore interest at the rate of 5% per annum, compounded annually. The total interest amount owed as of November 11, 2024, was $91,968, and is included in the total loan amount of the $4,136,968. After completion of the initial public offering, from the proceeds thereof, the Company paid $4,243,002 in settlement of the outstanding obligation to MDB Capital Holdings, LLC. As of December 31, 2024, the Company has a payable to MDB Capital Holding LLC of $178,966. The balance is expected to be paid in 2025 and does not bear any interest. General Policy for Evaluating Related Party Transactions Related party transactions will be reviewed by the audit committee, generally under its authority to review situations that give rise to conflicts of interest, as set forth in the audit committee charter. The policy of the Company is to evaluate those situations where an individual’s private interests interfere or conflict in any way (or even appear to interfere or conflict) with the interests of the Company. A common situation is one that involves a transaction between the Company and a party that is a director, officer or employee, or their respective related parties or affiliates or an entity under the control of those persons. The audit committee shall review the material facts of all related party transactions with the objective of determining to either approve or disapprove the Company entering into the transaction. The audit committee will review the relevant facts and circumstances of a related party transactions taking into account, among other factors, (i) whether the transaction was undertaken in the ordinary course of business of the Company, (ii) whether the related party transaction was initiated by the Company or the related party, (iii) whether the transaction is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party, (iv) the purpose of, and the potential benefits to the Company of, the related party transaction, (v) the approximate dollar value and the terms of the obligations involved in the related party transaction, (vi) the extent of the related party’s interest in the transaction, and (vii) any other information that would be material to investors in light of the circumstances of the particular transaction. Approval may be a standing approval for the same types of transactions, where it is warranted. The audit committee may also ratify related party transactions that have occurred, but related parties are encouraged to seek prior approval of a transaction so as not to face the situation of having to unwind or modify it. Former Parent Corporation MDB Capital Holdings, LLC, is the Company’s former parent company and the controlling shareholder, beneficially owning 48.25% of our shares of Common Stock as of the date of this report . Messrs. Christopher Marlett, Anthony DiGiandomenico are majority shareholders and directors of MDB Capital Holdings LLC, and directors of the Company. Christopher Marlett holds the position of Chairman of the Board in the Company. In addition, Mr. Edgardo Rayo, a director of the Company is an employee of an affiliate of MDB Capital Holdings LLC. Item 14. Principal Accountant Fees and Services During the years ended December 31, 2024 and 2023, RBSM, LLP was the Company’s independent registered public accounting firm. The following table sets forth fees billed to us by our independent registered public accounting firm: 2024 2023 Audit fees (1) $ 145,000 125,000 Audit-related fees (2) - - Tax fees - - Total principal accountant fees and services $ 145,000 125,000 (1) Audit fees consisted primarily of fees for the audit of our annual financial statements and reviews of the financial statements included in our registration statement for our initial public offering, and quarterly reports and current reports. (2) Audit-related fees consist of fees billed for services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under Audit fees. 49 PART IV Item 15. Exhibits and Financial Statement Schedules a. Documents Filed as Part of this Report The following consolidated financial statements of eXoZymes Inc. are filed as part of this Annual Report on Form 10-K: Page CONSOLIDATED FINANCIAL STATEMENTS INDEX Report of Independent Registered Public Accounting Firm F-1 Audited Consolidated Financial Statements Consolidated Balance Sheets –December 31, 2024 and 2023 F -2 Consolidated Statements of Operations – Years Ended December 31, 2024 and 2023 F-3 Consolidated Statements of Changes in Stockholder’s Equity – Years Ended December 31, 2024 and 2023 F-4 Consolidated Statements of Cash Flows – Years Ended December 31, 2024 and 2023 F-5 Notes to Consolidated Financial Statements F-6 50 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To: The Board of Directors and Stockholders of eXoZymes, Inc.(FKA Invizyne Technologies, Inc.) Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of eXoZymes, Inc. (FKA Invizyne Technologies, Inc.) and its subsidiary (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. The Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the accompanying consolidated financial statements, the Company has suffered recurring losses from operations, generated negative cash flows from operating activities, has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans in regards to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ RBSM LLP PCAOB ID 587 We have served as the Company’s auditor since 2023 March 31, 2025 Las Vegas, Nevada F- 1 EXOZYMES INC. CONSOLIDATED BALANCE SHEETS December 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 9,719,310 $ 66,533 Grants receivable 737,282 882,319 Prepaid expenses and other current assets 363,790 264,762 Total current assets 10,820,382 1,213,614 Property and equipment, net 882,445 753,376 Operating lease right-of-use asset, net 1,331,577 1,591,519 Total assets $ 13,034,404 $ 3,558,509 LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT) Accounts payable $ 924,252 $ 702,911 Due to affiliates 178,966 445,128 Operating lease liabilities – Current 230,027 224,988 SAFE Liability - 1,000,000 Taxes payable - 42,267 Total current liabilities 1,333,245 2,415,294 Deferred grant reimbursement 123,579 140,703 Operating lease liabilities 1,156,805 1,386,831 Total liabilities $ 2,613,629 $ 3,942,828 Stockholders’ Equity (Deficit): Preferred stock, $ 0.000001 par value, 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively. - - Common shares, 100,000,000 authorized shares at $ 0.000001 ; 8,367,810 and 6,250,002 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 8 6 Additional Paid-in-capital 22,366,725 5,700,298 Accumulated (deficit) ( 11,945,958 ) ( 6,084,623 ) Total stockholders’ equity (deficit) 10,420,775 ( 384,319 ) Total liabilities and stockholders’ equity (deficit) $ 13,034,404 $ 3,558,509 The accompanying notes are an integral part of these consolidated financial statements. F- 2 EXOZYMES INC. CONSOLIDATED STATEMENTS OF OPERATIONS 2024 2023 Year ended December 31, 2024 2023 Total operating income $ - $ 70,069 Operating costs: General and administrative costs: Compensation 2,527,772 596,174 Professional fees 1,167,249 436,338 Information technology 38,658 21,803 General and administrative-other 329,660 284,496 Total general and administrative costs 4,063,339 1,338,811 Research and development costs, net of grants amounting to $ 2,290,107 and $ 2,954,208 , for the years ended December 31 1,868,766 527,480 Total operating costs 5,932,105 1,866,291 Net operating loss ( 5,932,105 ) ( 1,796,222 ) Other income/(expense): Interest income/ (expense), net 77,612 100 Other (expense) ( 6,834 ) - Change in fair value of SAFE ( 8 ) ( 200,000 ) Loss before income taxes ( 5,861,335 ) ( 1,996,122 ) Income taxes - 42,267 Net loss $ ( 5,861,335 ) $ ( 2,038,389 ) Net loss per common share – basic and diluted ( 0.89 ) ( 0.33 ) Weighted average of common shares outstanding – basic and diluted 6,563,255 6,250,002 The accompanying notes are an integral part of these consolidated financial statements. F- 3 EXOZYMES INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) Years Ended December 31, 2024 and 2023 Shares Amount Paid-in Capital Deficit Total Common Stock Additional Accumulated Shares Amount Paid-in Capital Deficit Total Balance, December 31, 2023 6,250,002 6 5,700,298 ( 6,084,623 ) ( 384,319 ) Stock based compensation - - 1,125,639 1,125,639 Common stock issued for exercise of options 5,141 - - - Issuance of common shares 1,987,666 2 14,528,962 14,528,964 Issuance of warrants to purchase common shares - - 11,819 11,819 Conversion of SAFE to common shares 125,001 - 1,000,007 1,000,007 Net loss - - - ( 5,861,335 ) ( 5,861,335 ) Balance, December 31, 2024 8,367,810 8 22,366,725 ( 11,945,958 ) 10,420,775 Common Stock Additional Accumulated Shares Amount Paid-in Capital Deficit Total Balance, December 31, 2022 6,250,002 6 5,418,760 ( 4,046,234 ) 1,372,532 Balance 6,250,002 6 5,418,760 ( 4,046,234 ) 1,372,532 Stock based compensation - - 281,538 - 281,538 Net loss - - - ( 2,038,389 ) ( 2,038,389 ) Balance, December 31, 2023 6,250,002 6 5,700,298 ( 6,084,623 ) ( 384,319 ) Balance 6,250,002 6 5,700,298 ( 6,084,623 ) ( 384,319 ) The accompanying notes are an integral part of these consolidated financial statements. F- 4 EXOZYMES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 5,861,335 ) $ ( 2,038,389 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of Deferred Grant Reimbursement ( 54,359 ) ( 51,840 ) Depreciation of property and equipment 267,382 196,937 Non-cash lease expense 34,955 10,570 Stock-based compensation 1,125,639 281,538 Change in fair value of SAFE 8 200,000 Changes in operating assets and liabilities: (Increase) in - Grants receivable 145,037 ( 72,787 ) Prepaid expenses and other current assets ( 99,028 ) ( 163,625 ) Increase (decrease) in - Accounts payable and Accrued expenses 221,340 272,890 Due to related party ( 4,243,022 ) 205,128 Tax Payable ( 42,267 ) ( 21,292 ) Net cash (used in) operating activities $ ( 8,505,650 ) $ ( 1,180,870 ) CASH FLOWS FROM INVESTING ACTIVITIES: Deferred grant reimbursement 37,235 ( 22,455 ) Purchases of property and equipment ( 396,451 ) ( 288,712 ) Net cash (used in) investing activities $ ( 359,216 ) $ ( 311,167 ) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common shares 14,528,964 - Related Party Note 3,976,860 200,000 Issuance of Warrants for Private placement 11,819 - SAFE Note - 800,000 Net cash provided by financing activities $ 18,517,643 $ 1,000,000 NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS 9,652,777 ( 492,037 ) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 66,533 558,570 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 9,719,310 $ 66,533 Supplemental disclosures of cash flow information: Income taxes - 63,559 Non-cash investing and financing activities: Modification of lease - right-of-use asset and lease liability 273,000 Payable for fixed assets purchased 44,226 Conversion of SAFE Note to common shares 1,000,008 - The accompanying notes are an integral part of these consolidated financial statements. F- 5 EXOZYMES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Audited) Years ended December 31, 2024 and 2023 1. Organization and Description of Business eXoZymes Inc. formerly known as Invizyne Technologies Inc. was formed in Nevada in 2019 and its wholly owned subsidiary Invizyne Technologies Inc was formed in California in 2014, together (“eXoZymes”). eXoZymes was formed with the vision of taking nature’s building blocks to make molecules of interest, effectively simplifying nature. eXoZymes’ technology is a differentiated and unique synthetic biology platform which would enable the scalable exploration of large number of molecules and properties found in nature. eXoZymes was a majority owned technology development subsidiary of MDB Capital Holdings, LLC (“MDB”) until the November 2024 initial public offering, when the holdings by MDB were diluted to a current 48 % minority interest as of December 31, 2024. Prior to January 14, 2022, MDB Capital, a subsidiary of MDB, owned a majority interest in eXoZymes. On January 14, 2022, in a corporate reorganization, MDB Capital distributed 100 % of its equity interest in eXoZymes to its members in proportion to their respective interests. On June 1, 2022, the Company signed a joint venture with Neuractas Therapeutics, a preclinical company developing high impact therapeutics, to work with the Company on deuterated cannabinoid molecules, for which the Company has filed a provisional patent application. No business activities have occurred to date. The Company follows Accounting Standards Codification subtopic 323-10, Investments-Equity Methods and Joint Ventures (“ASC 323-10”). On October 3, 2024, our board of directors approved a two-for-one (2:1) stock split of our issued and outstanding Common Stock. No fractional shares were issued as a result of the stock split; any fractional share resulting from the stock split was rounded up to the next whole share. As a result of the stock split, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units and warrants issued by us and outstanding immediately prior to the effective time of the stock split, which resulted in a proportionate decrease in the number of shares of our Common Stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants and a proportionate increase in the exercise price of all such stock options, restricted stock units and warrants. In addition, the number of shares reserved for issuance under our equity compensation plans were decreased proportionately. All share and per share amounts of Common Stock have been retroactively adjusted to reflect the Common Stock split. Going Concern These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company incurred net losses of $ 5,861,335 and $ 2,038,389 during the years ended December 31, 2024 and 2023, respectively, and used cash for operations of $( 8,505,650 ) and $( 1,180,870 ) for the years ended December 31, 2024 and 2023, respectively. Management 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 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. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and wholly owned subsidiary. The accompanying consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. F- 6 Reclassification Certain prior period balances have been reclassified to conform to the Company’s current year presentation. We have reclassified certain prior period income amounts from R&D expenses and a total of $ 19,186 has been reclassified from general and administrative costs within our consolidated statements of operations to conform to our current period presentation. These reclassifications did not affect total costs, and expenses, (loss) income from operations, or net (loss) income. Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the disclosure of contingent assets and liabilities. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in the calculation of right-of-use asset and lease liabilities, accruals for potential liabilities, SAFE liability, and the realization of any deferred tax assets. Emerging Growth Company The Company is an “emerging growth company,” or “EGC” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such choice to opt out is irrevocable. The Company has elected to opt out of the extended transition periods. Concentration of Risk The Department of Energy has contributed 69 % and the NIH has contributed 31 % of all grant reimbursements for the year ended December 31, 2024. The Company believes it is not exposed to significant credit risk on government grant funding, based on the nature of eXoZymes’ grant receivables. F- 7 Revenue Recognition The Company primarily generated revenues from its strategic alliances. The strategic alliances with strategic collaborators typically contain multiple elements, including research and other licenses, research and development services, obligations to develop and manufacture pre-commercial and commercial material, and options to obtain additional research and development services. Such arrangements provide for various types of payments to us, including upfront fees, and funding of research and development services. Such payments are often not commensurate with the timing of revenue recognition and therefore result in deferral of revenue recognition. The Company analyzes the collaboration arrangements to assess whether they are within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement between the Company and the collaboration partner are within the scope of other accounting literature. If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, the Company accounts for those aspects of the arrangement within the scope of ASC 606. If the Company concludes that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, the Company recognizes its allocation of the shared costs incurred with respect to the jointly conducted activities as a component of the related expense in the period incurred. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) each performance obligation is satisfied. ASC 606 requires significant judgment and estimates and results in changes to, but not limited to: (i) the determination of the transaction price, including estimates of variable consideration, (ii) the allocation of the transaction price, including the determination of estimated selling price, and (iii) the pattern of recognition, including the application of proportional performance as a measure of progress on service-related promises and application of point-in-time recognition for supply-related promises. Cash and Cash Equivalents The Company considers highly liquid investments with original maturities or remaining maturities upon purchase of three months or less to be cash equivalents. There were no cash equivalents held by the Company as of December 31, 2024. The Company’s policy is to maintain its cash balances with financial institutions with high credit ratings and in accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”). The Company periodically reviews the financial condition of the financial institutions and assesses the credit risk of such investments. The Company may periodically have cash balances in financial institutions more than the FDIC insurance limits of $ 250,000 . On December 31, 2024, the Company had approximately $ 9,353,378 of cash and unrestricted cash in financial institutions in excess of FDIC insured limits. The Company did not experience any credit risk losses during the years ended December 31, 2024 and 2023. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; F- 8 ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. The following tables set forth the fair value of the Company’s consolidated financial instruments that were measured at fair value on a recurring basis as of December 31, 2024 and December 31, 2023: Schedule of Financial Instruments Measured at Fair Value on Recurring Basis Level 1 Level 2 Level 3 Total December 31, 2024 Level 1 Level 2 Level 3 Total Safe Note - - - - Total fair value - - - - Level 1 Level 2 Level 3 Total December 31, 2023 Level 1 Level 2 Level 3 Total Safe Note - - $ 1,000,000 $ 1,000,000 Total fair value - - $ 1,000,000 $ 1,000,000 The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying consolidated balance sheets. The fair values of cash and cash equivalents, prepaid expenses and other, accounts payable and accrued expenses, and due to related party are estimated to approximate the carrying values as of December 31, 2024 and December 31, 2023. Property and Equipment Property and equipment are recorded at cost. Major improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Gains and losses from disposition of property and equipment are included in the statement of operations when realized. Depreciation is provided using the straight-line method over the following estimated useful lives: Schedule of Property and Equipment Estimated Useful Lives Laboratory equipment 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of the lease duration or the life of the improvements Property and equipment consist of the following as of December 31, 2024 and December 31, 2023, respectively: Schedule of Property and Equipment December 31, 2024 December 31, 2023 Laboratory equipment 1,277,647 885,696 Furniture and fixtures 54,338 49,838 Leasehold improvements 279,161 279,161 Total property and equipment 1,611,146 1,214,695 Less: Accumulated depreciation ( 728,701 ) ( 461,319 ) Property and equipment, net 882,445 753,376 Depreciation expenses were $ 267,382 and $ 196,937 , for the years ended 2024 and 2023, respectively. F- 9 Research Grants eXoZymes receives grant reimbursements, which are offset against research and development expenses in the consolidated statements of operations. In addition to actual reimbursements, eXoZymes also receives indirect expense grants (which are not reimbursement-based) and fees (typically of minor significance). It is important to note that there may be instances where the grants received for indirect costs exceed the actual costs, resulting in a negative impact. For capitalized assets, grant reimbursements are recognized over the useful life of the assets. Any portion of the grant not yet recognized is recorded as deferred grant reimbursements and included as a liability in the consolidated balance sheet. Grants that operate on a reimbursement basis are recognized on the accrual basis and are offsets to expenses to the extent of disbursements and commitments that are reimbursable for allowable expenses incurred as of December 31, 2024 and 2023, and respectively, expected to be received from funding sources in the subsequent year. Management considers such receivables on December 31, 2024 and 2023, respectively, to be fully collectable due to the historical experience with the Federal Government of the United States of America. Accordingly, no allowance for credit losses on the grants receivable was recorded in the accompanying consolidated financial statements. Summary of grants receivable activity for the years ended December 31, 2024 and 2023, is presented below: Schedule of Grants Receivable Activity December 31, 2024 December 31, 2023 Balance at beginning of period 882,319 809,532 Grant costs expensed 2,235,163 2,836,876 Grants for equipment purchased 43,615 - Grant fees 54,944 117,332 Grant funds received ( 2,478,759 ) ( 2,881,421 ) Balance at end of period 737,282 882,319 eXoZymes has received three grants provided by the National Institute of Health, the Department of Energy and Department of Defense through December 31, 2024. The first grant was awarded on October 1, 2023 and the latest of these grants was set to expire on May 14, 2026 , however grants can be extended, or new phases can be granted, extending the expiration of the grant. None of the grants has commitments made by the parties, provisions for recapture, or any other contingencies, beyond complying with the terms of each research and development grant. 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 the research grants after incurring the related expenses. Amounts received under research grants are offset against the related research and development costs in the consolidated statements of operations. For the years ended December 31, 2024 and 2023, respectively, grants amounting to $ 2,235,163 and $ 2,836,876 were offset against the research and development costs. Grant drawdowns, which includes grants costs expensed, grants for equipment purchased, and grant fees, for the years ended December 31, 2024 and 2023, respectively, totaled $ 2,333,722 and $ 2,954,208 . Research and Development Costs Research and development costs are expensed as incurred. Research and development costs consist primarily of compensation costs, fees paid to consultants, and other expenses relating to the development of eXoZymes’s technology. For the years ended December 31, 2024 and 2023, research and development costs prior to offset of the grants amounted to $ 4,202,488 , and $ 3,481,687 , respectively, which includes grant costs expensed, grants fees, and research and development costs, net of the grant received. F- 10 Patent and Licensing Legal and Filing Fees and Costs Due to the significant uncertainty associated with the successful development of one or more commercially viable products based on the research efforts and related patent applications, all patent and licensing legal and filing fees and costs related to the development and protection of its intellectual property are charged to operations as incurred. Patent and licensing legal and filing fees and costs were $ 260,779 and $ 123,876 for the years ended December 31, 2024 and 2023, respectively. Patent and licensing legal and filing fees and costs are included in general and administrative costs in the consolidated statements of operations. Related Party and Due to Affiliates Expenses As of December 31, 2024, The Company has a outstanding payable of $ 178,966 to MDB Capital Holdings, LLC. The payable is non interest bearing and will be paid in 2025. Segment Reporting We manage and operate the business as a single reportable operating segment , w ith the Company’s sole focus on the research and commercialization of exozyme biosolutions. Our business is led by our chief executive officer, who is our Chief Operating Decision Maker (“CODM”). The Company is required to apply the guidance in ASC 280 and identify significant segment expenses and other segment items for its single reportable segment. Because the CODM receives detailed financial reports at a lower level than is included on the Company’s consolidated income statement, the Company identifies which of those expenses qualify as significant segment expenses. The CODM manages the business on a consolidated basis and uses consolidated net income as reported on its income statement to allocate resources and assess performance. In accordance with ASC 280, eXoZymes concludes that consolidated net income is the measure of segment profit or loss that is required to be reported because it is the measure determined in accordance with measurement principles most consistent with GAAP. We do not prepare discrete financial information with respect to separate products. Accordingly, we view our business as one reportable operating segment. 3. Equity Equity In April 2019, the Company entered into an equity subscription agreement with Public Ventures, LLC, d/b/a MDB Capital (formerly known as MDB Capital Group LLC), which was later transferred to MDB in 2022, whereby MDB would purchase up to $ 5,000,000 of eXoZymes’s Common Stock at $ 3.04 per share. At December 31, 2021, MDB had purchased 1,197,246 shares for a total of $ 3,644,930 . On September 22, 2022, MDB completed its equity subscription agreement, purchasing 445,099 shares, thus owning a total of 1,642,345 shares of eXoZymes’s Common Stock. MDB waived its 10 % cash fee relative to the Funding Agreement in exchange for other modifications. As a condition of the Funding Agreement, warrants to purchase 98,814 shares of eXoZymes Common Stock were issued (the “Funding Warrants”), which vested as amounts were funded. Through December 31, 2024 and December 31, 2023, respectively, 205,293 and 205,293 of Funding Warrants have vested. Total value of the warrants as December 31, 2024 and December 31, 2023 was $ 320,790 . 4. Stock-Based Compensation eXoZymes’ 2020 Equity Incentive Plan (the “2020 Plan”), which was approved by the eXoZymes shareholders, permits grants to its officers, directors, and employees for up to 938,832 shares of eXoZymes’ Common Stock. On May 1, 2023 the board and shareholders approved an increase of 1,558,175 shares under the plan. The 2020 Plan authorizes the issuance of stock options, shares of restricted stock, and restricted stock units, among other forms of equity-based awards. On February 1, 2024, stock options to purchase 155,818 shares of Common Stock were granted at an exercise price of $ 3.32 per share, which was equal to the fair value of the Common Stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was Common Stock price of $ 3.32 , option exercise price of $ 3.32 , expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 4.20 %, expected annual volatility of 95.85 %, and annual rate of dividends of $ 0 . F- 11 On April 1, 2024, stock options to purchase 125,975 shares of Common Stock were granted at an exercise price of $ 8.00 per share, which was equal to the fair value of the Common Stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was Common Stock price of $ 8.00 , option exercise price of $ 8.00 , expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 4.34 %, expected annual volatility of 95.38 %, and annual rate of dividends of $ 0 . On May 19, 2024, 2,347 stock options were exercised using a cashless exercise option. The individual received a stock option grant of 5,194 shares of which 3,376 shares were vested and exercisable. 1,029 shares were sold using a cashless exercise option to acquire the remaining 2,347 shares. The remaining unvested options totaling 1,818 shares were forfeited. On June 1, 2024, stock options to purchase 444,076 shares of Common Stock were granted at an exercise price of $ 8.00 per share, which was equal to the fair value of the Common Stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was Common Stock price of $ 8.00 , option exercise price of $ 8.00 , expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 4.52 %, expected annual volatility of 94.78 %, and annual rate of dividends of $ 0 . On December 20, 2024, two individuals exercised their options agreements. Both agreements had identical terms and were exercised on the same date. Each agreement exercised 2,597 stock options using a cashless exercise option. 1,200 shares were sold using a cashless exercise option to acquire the remaining 1,397 shares. There were no remaining unvested options to be forfeited. As of December 31, 2024 stock options to purchase 545,043 shares of Common Stock were vested, the weighted average exercise price is $ 4.66 , the aggregate intrinsic value is $ 0.00 , and the weighted average remaining contractual term is 6.13 years. eXoZymes stock-based compensation were $ 1,125,639 and $ 281,538 for the years ended December 31, 2024 and 2023. As of December 31, 2024, the unrecognized stock-based compensation is $ 4,554,320 . A summary of stock option activity during the years ended December 31, 2024 and 2023 is presented below: Schedule of Stock Options Activity Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Stock options outstanding at January 1, 2023 533,680 $ 2.44 4.83 Granted 51,940 3.32 7 Exercised - - - Expired - - - Stock options outstanding at September 30, 2023 585,620 $ 2.52 4.54 Granted 457,067 3.32 7.00 Exercised - - - Expired - - - Stock options outstanding at December 31, 2023 1,042,687 $ 2.86 5.47 Granted 725,878 7.00 7.00 Exercised ( 8,570 ) 5.81 - Expired ( 12,206 ) 2.44 - Stock options outstanding at December 31, 2024 1,747,789 4.66 6.13 Stock options exercisable at December 31, 2023 318,239 $ 2.52 4.28 Stock options exercisable at December 31, 2024 545,043 $ 4.66 6.13 F- 12 On March 28, 2022, eXoZymes granted 241,718 restricted stock units (“RSUs”) at a value of $ 2.44 per share. These RSUs were issued in 2021 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up after an initial public offering of the Company, or upon the change of control of the Company by eXoZymes, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period on November 11, 2025 , or upon the change of control of eXoZymes. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $ 589,792 . On May 1, 2023, eXoZymes granted 100,820 restricted stock units (“RSUs”) at a value of $ 3.32 per share. These RSUs were issued in 2023 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up after an initial public offering of the Company, or upon the change of control of the Company by eXoZymes, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period, on November 11, 2025 , or upon the change of control of eXoZymes. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $ 334,722 . Schedule of Restricted Stock Units Activity Number of Restricted Stock Units Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life (in Years) Restricted stock units outstanding at December 31, 2023 424,656 $ 2.64 8.62 Granted - - - Exercised - - - Expired - - - Forfeited - - - Restricted stock units outstanding at December 31, 2024 424,656 $ 2.64 8.04 Restricted stock units at December 31, 2023 424,656 $ 2.64 8.62 Restricted stock units at December 31, 2024 424,656 $ 2.64 7.37 5. Earnings Per Share The Company’s computation of earnings (loss) per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) attributable to holders of the Common Stockholders divided by the weighted average of the common shares outstanding for the period. Diluted EPS is like basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., preferred shares, warrants and stock options) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Loss per common share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the respective periods. Basic and diluted loss per common share was the same for all periods presented because warrants, RSU’s and options outstanding were anti-dilutive, for a total of 1,321,236 and 948,188 shares, respectively. F- 13 Basic and fully diluted earnings (loss) per share is calculated as follows for the years ended December 31, 2024 and 2023: Schedule of Basic and Diluted Earnings (Loss) Per Share December 31, 2024 December 31, 2023 Common shares Common shares Net loss ( 5,861,335 ) $ ( 2,038,389 ) Weighted average shares outstanding – basic and diluted 6,563,255 6,250,002 Net loss per share – basic and diluted ( 0.89 ) $ ( 0.33 ) The following financial instruments were not included in the diluted loss per share calculations as of December 31, 2024 and December 31, 2023 because their effect was anti-dilutive: Schedule of Anti-dilutive Loss Per Share December 30, 2024 December 31, 2023 Warrants to purchase common stock 351,537 205,293 Options 545,043 318,239 Restricted stock awards units 424,656 424,656 Total 1,321,236 948,188 6. Commitments and Contingencies Legal Claims The Company may be subject to legal claims and actions from time to time as part of its business activities. As of December 31, 2024 and 2023, the Company was not subject to any pending or threatened legal claims or actions. 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 but does not believe they 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. 7. Employee Benefit Plans eXoZymes sponsors an individual 401(k) defined contribution plan for the benefit of employees when eligible. The plan allows eligible employees to contribute a portion of their annual compensation, not to exceed annual limits for the employee as established by the Department of Treasury. eXoZymes makes matching contributions for participating employees up to a certain percentage of the employee contributions; matching contributions were funded for the years ended December 31, 2024 and 2023. Benefits under this plan were available to all employees, and employees become fully vested in the employer’s contribution upon receipt. A total of $ 111,336 and $ 130,912 was contributed to the 401 (k) plan for years ended on December 31, 2024 and 2023, respectively. eXoZymes also provides health and related benefit plans for eligible employees. F- 14 8. Exclusive License Agreement (EXoZymes) On April 19, 2019, eXoZymes entered into a license agreement (the “License Agreement”) with The Regents of the University of California (“The Regents”) for patent rights and associated technology relating to the biosynthetic platform being developed by the Company. Certain individuals named as inventors of the patent rights are also the founding stockholders of eXoZymes. One of the founders of eXoZymes was the head of the laboratory which was used in the research and development of patents and associated technology subject to the agreement with The Regents. Under the License Agreement, eXoZymes holds an exclusive license of the patent rights and a non-exclusive license for the associated technology to make, have made, use, have used, sell, have sold, offer for sale, and import licensed products in the field of use. Under the License Agreement, eXoZymes paid an initial license fee and is to pay an annual license fee and royalties on net sales, a minimum annual royalty that is credited against the royalties on net sales, and a percentage of any sublicensing income. The net income royalty commences after the first commercial sale of a licensed product. As of December 31, 2024, there were no accrued royalties recorded. Under the License Agreement, eXoZymes is required to achieve certain development milestones. eXoZymes is obligated to make payments upon achievement of certain sales thresholds, as defined in the License Agreement. As of December 31, 2024 the development milestones have been met. The following net sales milestone payments have not yet been incurred. The net sales milestones do not have a deadline and are listed below as of December 31, 2024. ● A payment of $ 250,000 when a licensed product reaches $ 1,000,000 in cumulative net sales. ● A payment of $ 350,000 when a second licensed product reaches $ 2,000,000 in cumulative net sales. The Regents have the right terminate the License Agreement for breaches of the License Agreement by eXoZymes eXoZymes may terminate the License Agreement, in whole or in part as to a particular patent right, at any time by providing notice of termination to The Regents as defined in the License Agreement. The payments made to the Regents in connection with our license agreement with the Regents, from 2019 to December 31, 2024, has aggregated $ 371,803 . This includes payments for patent fees associated with the license and maintenance fees. Under the License Agreement, the Company issued 249,689 shares of Common Stock, then representing four percent of its common equity, as initial consideration. The Company agreed to issue additional shares of Common Stock to The Regents so that The Regents were to own no less than four percent of all outstanding common shares of the Company until the Company received an aggregate amount of $ 5,000,000 from the sale of equity securities. The Company received equity funding of $ 5,000,000 as of June 2022, fulfilling the non-dilution provision of the License Agreement, and no additional common shares are required to be issued to The Regents. eXoZymes accounts for the costs incurred in connection with the License Agreement in accordance with ASC Topic 730, Research and Development. The Company paid license fees for the years ended December 31, 2024 and 2023, respectively, of $ 3,389 and $ 4,868 . 9. Leases For operating leases, the Company records right-of-use assets and corresponding lease liabilities in the consolidated balance sheets for all leases with terms longer than twelve months. The Company has two operating leases, with no variable lease costs, and no finance leases as of December 31, 2024. On April 3, 2023, the Company executed a lease for new office space next to the existing space at eXoZymes in the Los Angeles, California metropolitan area. The lease with a term of 60 months which began on July 1, 2023 and ends on June 30, 2028, without an option to extend. The initial base rent was $ 13,277 per month. The lease provides for annual increases. The base rent for the lease in the final year is $ 14,943 per month. F- 15 In April 2023, eXoZymes made changes to an existing lease agreement, which resulted in an extension of the lease term by an additional 21 months. The revised lease maintained the same escalation rate for lease payments as the previous arrangement. To account for this modification, the Company reevaluated the remaining lease term at the time of execution. As the Company was actively utilizing the premises, adjustments were made to reflect the revaluation of both the right-to-use asset and the corresponding lease liability in line with the updated lease term. This was originally entered into in August 2021, with a term of 60 months beginning on May 1, 2023 and ending on April 30, 2028, with an option to extend for 60 additional months. At the time the lease commenced, it was not probable the Company would exercise the one five-year option to extend the facility lease; therefore, this extension option is not included in the lease analysis. The initial base rent is $ 14,371 per month. The lease provides for annual increases. The base rent for the lease in the final year is $ 16,259 per month. Additionally, eXoZymes is responsible for annual operating cost increases of 2.5 %, which are included in the rent. On October 30, 2023, the Company executed an addendum to the current lease for additional office space in Monrovia, California, the expected occupancy of the additional space was May 1, 2023. The lease adds a term of 20 months to the current term for a total of 72 months for the current term, the additional space is for 72 months, both spaces will expire on April 30, 2028 without an option to extend. The expansion space will have an initial base rent of $ 13,277 per month, along with the current lease of $ 14,371 per month for the current leased space for a new total of $ 27,648 The lease provides for annual increases. The base rent for the lease in the final year is $ 15,391 per month for the expansion space and $ 16,747 for the current space for a total of $ 32,138 . ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate in its lease calculations when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate for a fully collateralized loan with a similar term of the lease that is based on the information available at the inception of the lease. Schedule of Operating Leases December 31, 2024 December 31, 2023 Operating leases: Right-of-use assets $ 1,331,577 $ 1,591,519 Operating lease liabilities $ 1,386,832 $ 1,611,819 Weighted average remaining lease term in years 4.58 4.84 Weighted average discount rate 7.58 % 7.30 % Cash paid for amounts included in the measurement of lease liabilities $ 339,576 $ 253,191 Right-of-use assets obtained in exchange for lease liabilities $ - $ 1,018,002 The operating lease costs were $ 374,531 and $ 263,761 , respectively for the years ended December 31, 2024 and 2023. Future payments due under operating leases as of December 31, 2024 are as follows: Schedule of Future Payments Due Under Operating Leases Year Amount 2025 348,873 2026 358,428 2027 368,250 2028 378,576 Thereafter 192,828 Total $ 1,646,955 Less effects of discounting ( 260,123 ) Total operating lease liabilities $ 1,386,832 10. Simple Agreement for Future Equity (SAFE) On July 3, 2023, eXoZymes executed a simple agreement for future equity (SAFE) with MDB Capital Holdings LLC which provided funding of $ 785,000 . On July 3, 2023, eXoZymes executed a simple agreement for future equity (SAFE) with Paul Opgenorth who provided funding of $ 15,000 . Both agreements have identical terms. F- 16 On November 11, 2024, the Company gave instruction to issue an aggregate of 125,001 shares of Common Stock on the conversion of the simple agreements for future equity (SAFEs) issued on July 3, 2023, to MDB Capital Holdings LLC and Paul Opgenorth, which provided funding of $ 800,000 . The SAFEs converted by their terms on the sale of the shares of Common Stock in the IPO. 11. Income Taxes Amounts recognized for income taxes are reported in “income tax expense (benefit)” on the consolidated statements of operations. Income tax expense (benefit) consisted of the following: Schedule of Income Tax Expense (Benefit) 2024 2023 Year Ended December 31, 2024 2023 Current taxes: Federal - 42,267 State - 0 Deferred taxes: Federal - 0 State - 0 Income Tax Expense (Benefit) - 42,267 As of December 31, 2024, the Company’s taxable entities had approximately $ 3,088,149 of net operating loss carryforwards for federal income tax purposes which can be carried forward indefinitely. The company also had approximately $ 9,424,083 of net operating loss carryforwards for California tax purposes which can be carried forward for 20 years. However, for taxable years 2024 through 2026, California has suspended the net operating loss (NOL) deduction for corporations with income subject to California taxation of $1 million or more . Corporations may continue to compute and carry over NOLs during the suspension period, with the carryover period extended for each suspended year. A similar suspension was in place for taxable years 2020 and 2021 but was lifted for 2022. A reconciliation of the federal statutory tax rate to the effective tax rate is as follows: Schedule of Reconciliation of the Federal Statutory Tax Rate to the Effective Tax Rate 2024 2023 Year Ended December 31, 2024 2023 Federal statutory rate 21.00 % 21.00 % State, net of federal tax benefit 6.98 % 5.93 % Permanent differences - 4.01 % - 0.40 % Return-to-provision adjustments 0.00 % 7.80 % Other - 4.52 % 2.97 % Valuation allowance - 19.46 % - 39.41 % Effective rate 0.00 % - 2.12 % F- 17 Significant components of the deferred tax assets and liabilities were as follows: Schedule of Significant Components of the Deferred Tax Assets and Liabilities 2024 2023 Year Ended December 31, 2024 2023 Deferred tax assets: Start-up expenditures 14,792 16,272 Sec 174 - Research & development costs 1,538,557 1,099,590 Stock compensation - 194,907 Lease liability 388,085 451,045 Investment Securities 43,437 42,000 Warrants 67,366 67,366 Bonus expense 188,820 83,951 Net operating loss carryforwards 1,306,652 509,041 Valuation allowance ( 3,065,959 ) ( 1,925,457 ) Total deferred tax assets 481,750 538,714 Deferred tax liabilities: Right-of-use asset ( 372,623 ) ( 445,364 ) Property and equipment principally due to differences in depreciation ( 109,127 ) ( 93,350 ) Total deferred tax liabilities ( 481,750 ) ( 538,714 ) Net deferred tax assets/(liabilities) - - Net deferred tax assets and liabilities were classified on the consolidated balance sheets as follows: 2024 2023 Year Ended December 31, 2024 2023 Deferred tax assets 481,750 538,714 Deferred tax liabilities ( 481,750 ) ( 538,714 ) Other noncurrent assets/(liabilities) - - In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. At December 31, 2024, based on projections of future taxable income for the periods in which the deferred tax assets are deductible, valuation allowances of approximately $ 3,065,959 were recorded for tax carryforwards and attributes to reduce the net deferred tax assets to an amount that is more likely than not to be recognized. The amount of deferred tax assets considered realizable could be reduced in the future if estimates of future taxable income during the carryforward period are reduced. In accordance with the applicable accounting standards, the Company recognizes only the impact of income tax positions that, based on their merits, are more likely than not to be sustained upon audit by a taxing authority. To evaluate its current tax positions in order to identify any material uncertain tax positions, the Company developed a policy of identifying and evaluating uncertain tax positions that considers support for each tax position, industry standards, tax return disclosures and schedules and the significance of each position. It is the Company’s policy to recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company had no material uncertain tax positions at December 31, 2024 and December 31, 2023. The tax years 2021 – 2024 remain open to examination for federal income tax purposes. F- 18 In accordance with the applicable accounting standards, the Company recognizes only the impact of income tax positions that, based on their merits, are more likely than not to be sustained upon audit by a taxing authority. To evaluate its current tax positions in order to identify any material uncertain tax positions, the Company developed a policy of identifying and evaluating uncertain tax positions that considers support for each tax position, industry standards, tax return disclosures and schedules and the significance of each position. It is the Company’s policy to recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company had no material uncertain tax positions at December 31, 2024 and December 31, 2023. The tax years 2021 – 2024 remain open to examination for federal income tax purposes. 12. Subsequent Events The Company has evaluated subsequent events through March 31, 2025, the date on which these financial statements were issued. b. Exhibits See “Exhibit Index” on the page following the consolidated financial statements and related footnotes and the signature page to this Annual Report on Form 10-K. c. Financial Statement Schedules No financial statement schedules are filed herewith because (i) such schedules are not required, or (ii) the information has been presented in the financial statements. F- 19 Item 16. Form 10-K Summary The Company has elected not to provide the summary of information under this item. Financials 51 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed in Monrovia, California, on its behalf by the undersigned, thereunto duly authorized. EXOZYMES INC. (the “Registrant”) Dated: March 31, 2025 By: /s/ Michael Heltzen Michael Heltzen President and Chief Executive Officer (Principal Executive Officer) Dated: March 31, 2025 By: /s/ Fouad Nawaz Fouad Nawaz VP of Finance (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Dated: March 31, 2025 By: /s/ Michael Heltzen Michael Heltzen President and Chief Executive Officer (Principal Executive Officer) Dated: March 31, 2025 By: /s/ Fouad Nawaz VP of Finance (Principal Financial and Accounting Officer) Dated: March 31, 2025 By: /s/ Christopher A. Marlett Christopher A. Marlett, Chairman of the Board and Director Dated: March 31, 2025 By: /s/ Anthony DiGiandomenico Anthony DiGiandomenico, Director Dated: March 31, 2025 By: /s/ James U. Bowie James U. Bowie, Director Dated: March 31, 2025 By: /s/ James J. Lalond James J. Lalonde, Director Dated: March 31, 2025 By: /s/ Lon E. Bell Lon E. Bell, Director Dated: March 31, 2025 By: /s/ Edgardo Rayo Edgardo Rayo, Director 52 EXHIBITS Exhibit Number Description of Exhibit 1.1 Underwriting Agreement between the Registrant and MDB Capital (Public Ventures, LLC) (incorporated herein by reference to Exhibit 1.2 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 3.1 Articles of Incorporation of the Registrant, filed April 17, 2019 (incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form S-1, Registration Statement No. 333-276987. 3.2 By-laws of the Registrant, February 1, 2024 (incorporated herein by reference to Exhibit 3.2 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 3.3 Amendment to Articles of Incorporation – Certificate of Correction filed April 30, 2019 (incorporated herein by reference to Exhibit 3.3 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 3.4 Amendment to Articles of Incorporation increasing the authorized capital, filed July 1, 2024 (incorporated herein by reference to Exhibit 3.4 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 3.5 Amendment to Articles of Incorporation, effecting reverse split, filed October 3, 2024 (incorporated herein by reference to Exhibit 3.5 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 3.6 Amendment to Articles of Incorporation, effecting a name change, filed February 10, 2025 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed February 11, 2025. 4.1 Form of Underwriters Warrant, issued November 11, 2024 (incorporated herein by reference to Exhibit 4.4 to the Registration Statement on Form S-1, Registration Statement No. 333-276987. 4.3* Description of Capital Stock. 10.1+ Form of Indemnification Agreement by and between the registrant and each of its directors and executive officers (incorporated herein by reference to Exhibit 10.1 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 10.2+ 2020 Equity Incentive Award Plan (incorporated herein by reference to Exhibit 10.2 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 10.3 License Agreement with The Regents of the University of California (incorporated herein by reference to Exhibit 10.4 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 10.4+ Employment Agreement by and between the registrant and Michael Heltzen (incorporated herein by reference to Exhibit 10.5 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 53 10.5+ Form of lock up agreement for the benefit of IPO underwriter (incorporated herein by reference to Exhibit 10.6 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 14.1 Code of Business Code and Ethics (incorporated herein by reference to Exhibit 14.1 to the Registration Statement on Form S-1, Registration Statement No. 333-276987). 19.1* Insider Trading Policy, 2024 21.1* Subsidiaries 31.1 * Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 * Certification of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial and Accounting, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.1* Clawback Policy 2024 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) + Indicates a management contract or compensatory plan. * Filed herewith. ** Furnished herewith. 54