EXOZ

Risk Factors Business Risk Factors eXoZymes has a limited operating history on which to evaluate its ability to achieve its operating objectives. eXoZymes was founded in 2019, and was focused on developing our science and technology in the first 5 years.
We are a pre-revenue, development stage synthetic biochemical company, despite now investing significant time and resources into productizing and commercializing our technology.
From inception through December 31, 2025, eXoZymes has received grants totaling $17,697,378, of which $4,058,367 was awarded in 2025 and $1,048,302 was awarded in 2024.
We anticipate that our losses will continue to increase from current levels during our continuing development stage. eXoZymes may not be successful in its efforts to use its proprietary biomanufacturing platform to build a pipeline of products.
The viability and benefits of our products in development, which currently include neutracuticals and pharmaceutical oriented products, and isobutanol (a 2G biofuel), may be difficult to assess because they are based on a relatively novel and complex technology. eXoZymes’s technology consists of using cell-free multi-step enzymatic bioconversion systems that we have named exozymes biosolutions.
We anticipate that, because some of the compounds are unique, eXoZymes will face all the hurdles of a new technology in the marketplace.
We believe we can further optimize our technological systems to continue running for longer than seven days thus optimizing the use of our enzymes and co-factors.
Fluctuations in pricing below our cost to manufacture would make the commercialization of such products unfeasible.
We are subject to risks related to our NCT program and commercialization efforts.
NCT represents the first to market product created by eXoZymes which has multiple layers of risk.
These include the following: ● Results to date are primarily in animal models and there remains uncertainty whether activation in humans will demonstrate the same effects observed in preclinical models. ● Although eXoZymes has validated pilot-scale production, the technology may face unforeseen challenges during full CMO scale-up or industrial transfer. ● NCT is not yet evaluated by the FDA and is not intended to diagnose, treat, cure, or prevent disease.
Nutraceutical regulatory pathways (GRAS/NDIN) carry uncertainty in timing and outcome. ● The nutraceutical market is competitive, and consumers often report inconsistent results from supplements; failure to differentiate our NCT product from others in the market meaningfully could affect adoption. ● NCTX’s business model relies on CMOs and partners; disruptions in supply chain, delays in manufacturing validation, or partner performance issues could materially affect timelines.
We do not have any manufacturing and distribution capabilities or arrangements, and will need to create these as we move towards commercialization of our products.
We do not yet have manufacturing arrangement or distribution capacity.
We will need to develop all of the foregoing elements of commercialization.
There are a number of companies in the nutraceutical and pharmaceutical industries that are pursuing, or may in the future pursue, the same or similar target molecules as those being developed by the Company.
For example, Brightseed Bio is focused on the discovery and development of plant-derived bioactive compounds, including molecules such as N-trans-caffeoyltyramine (“NCT”), and such companies may compete directly with the Company’s development and commercialization efforts We believe that a majority of the companies that present some aspect of competition are well established companies that have more experience identifying and carrying out the scientific development required in the research and development of products that will be competitive to those of eXoZymes.
In addition to established industry participants, we may also face competition from emerging startups and early-stage companies seeking to develop similar target molecules or enabling technologies.
These companies are often founded around novel scientific approaches, including artificial intelligence–driven discovery platforms, synthetic biology, or alternative biomanufacturing methods, and may target similar applications in the nutraceutical and pharmaceutical markets.
However, many of these early-stage companies are in the initial phases of development and typically operate with limited financial resources, constrained infrastructure, and smaller management teams.
As a result, they may lack the capital, scale, and operational capabilities required to advance from early discovery through commercialization.
We believe that we compete with these firms based on a number of factors, including our founders’ reputation and history, our work and successes to date since founding, our willingness and ability to strategically partner with other companies, the overall abilities and experience of our management and staff, and our ability to use our technologies to develop new products and create products for potential commercialization opportunities.
As of December 31, 2025, we have a number of licensed patents, issued patents and patent applications with the USPTO.
As our research develops, we believe the eXoZymes’s inventions and license will be able to cover a wide range of technologies that relate to biomanufacturing.
These inventions include new chemical entities, composition of matter intellectual property on novel and engineered individual enzymes with changes in stability, activity, specificity, or combination thereof, as well as systems of enzymes designed for pioneering novel manufacturing processes.
The license we hold from The Regents provides annual license fees and royalties based on income derived from the licensed patents.
In such an event, we would have to fund the fees from other sources, such as working capital, financing, or other income.
Some of our competitors may be able to bear the costs of such litigation or proceedings more effectively than we can because they have greater financial resources.
Risks Related to this Being a Public Company We incur substantial costs as a result of operating as a public company, and our board of directors is required to devote substantial time to oversight of our compliance requirements and corporate governance practices.
As a public company listed in the U.S., we incur significant legal, accounting and other expenses.
Our board of directors, management and other personnel must devote a substantial amount of time to these compliance requirements.
Moreover, these rules and regulations have substantial legal and financial compliance costs and will make some activities more time-consuming and costly.
These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we are required to furnish a report by our board of directors on our internal control over financial reporting.
To achieve compliance with Section 404 within the prescribed period, we engage in a process to document and evaluate our internal controls over financial reporting, which is both costly and challenging.
In this regard, we dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.
As a result, current and potential stockholders could lose confidence in our financial reporting. eXoZymes is subject to the risk that it has deficiencies in its internal control structure.
Effective internal controls are necessary to provide reliable financial reports and effectively prevent fraud.
We rely on a single laboratory location for our operations, research, and development activities.
If our facility experiences a disruption due to natural disasters, power failures, equipment malfunctions, cyberattacks, regulatory actions, or other unforeseen events, our ability to conduct operations could be severely impacted or completely halted.

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Gone since FY2024

Risk Factors Business Risk Factors eXoZymes has a limited operating history on which to evaluate its ability to achieve its operating objectives. eXoZymes was founded in 2019, and was focused on developing our science and technology until a year ago.
We are a pre-revenue, development stage synthetic biochemical company, despite now investing significant time and resources into commercializing our technology according to our Business Overview, Commercialization Strategy and Focus, and Business Model.
Our financial statements include a going concern footnote.
Our financial statements have been prepared on a going concern basis, which implies that the we will continue to realize our assets and discharge our 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.
From inception through December 31, 2024, eXoZymes has received grants totaling $13,639,011.
We anticipate our losses will continue to increase from current levels during our continuing development stage. eXoZymes may not be successful in its efforts to use its proprietary biomanufacturing platform to build a pipeline of products.
The viability and benefits of our products in development, which currently include nutraceuticals and pharmaceutical (e.g. cannabinoids), and isobutanol (a 2G biofuel), may be difficult to assess because they are based on a relatively novel and complex technology. eXoZymes’s technology consists of using cell-free multi-step enzymatic bioconversion systems that we have named exozymes biosolutions.
We anticipate, because some of the compounds are unique, that eXoZymes will face all the hurdles of a new technology in a marketplace.
We believe we can further optimize our technological systems to continue running for longer times than seven days thus optimizing the use of our enzymes and co-factors.
Fluctuations in pricing below our cost to manufacture would make the commercialization of such product unfeasible.
We do not have any significant sales, marketing, manufacturing and distribution capabilities or arrangements, and will need to create these as we move towards commercialization of our products.
We do not yet have a full sales team, marketing team, manufacturing or distribution capacity.
To date sales and marketing have been conducted by senior management staff, and been a part of their other management obligations.
To be able to commercialize our potential products and biosolutions, we will need to develop all of the foregoing elements of commercialization.
We do not have all relevant corporate experience in establishing these capabilities, and therefore, we may be unsuccessful in achieving commercialization and earning revenues.
We believe that setting up the commercialization aspects of a company will take a substantial amount of capital and commitment of time and effort.
We believe that a majority of the companies that present some aspect of competition are well established companies that have more experience identifying and carrying out the scientific development required in the research and development of products that will be competitive to those of eXoZymes.
We believe that we compete with those firms based on a number of factors, including our founders’ reputation and history, our work and successes to date since founding, our willingness and ability to strategically partner with other companies, the overall abilities and experience of our management and staff, and our ability to use our technologies to develop new products and create products for potential commercialization opportunities.
As of December 31, 2024, we have a number of licensed patents, issued patents and patent applications with the USPTO.
As our research develops, we believe the eXoZymes inventions and license will be able to cover a wide range of technologies that relate to biomanufacturing.
These inventions include new chemical entities, composition of matter intellectual property on novel and engineered individual enzymes with changes in stability, activity, specificity, or a combination thereof, as well as systems of enzymes designed for pioneering novel manufacturing processes.
The license we hold from The Regents provides for annual license fees and royalties based on income derived from the licensed patents.
In such an event, we would have to fund the fees from other sources, such as working capital, financings or other income.
Some of our competitors may be able to bear the costs of such litigation or proceedings more effectively than we can because of their having greater financial resources.
Risks Related to this Being a Public Company We will incur increased costs as a result of operating as a public company, and our board of directors will be required to devote substantial time to oversight of new compliance requirements and corporate governance practices.
As a public company listed in the U.S., we will incur significant legal, accounting and other expenses that we did not incur as a private company.
Our board of directors, management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified members of our board of directors.
However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we will be required to furnish a report by our board of directors on our internal control over financial reporting.
To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal controls over financial reporting, which is both costly and challenging.
In this regard, we will need to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.
We currently have limited accounting personnel with the background in public company accounting and reporting.
We will have to add personnel and devote personnel and financial resources to meet our reporting obligations as a publicly listed company.
We have been a private company with limited operating scale.
As of the date of this report, we do not have the appropriate accounting personnel to adequately execute our accounting processes with which to address our internal control over financial reporting.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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