EXOZYMES INC.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

For the year ended December 31, 2024, there was an increase of $1,341,286 in research and development costs due to an increase in salary and lab expenses and a decrease in grant funding. It is important to note that the upswing in grant funding was not linked to any specific event.

Current wording

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

Previous wording

The increase in assets was due to changes in several asset classes, but mainly in cash and cash equivalents after closing IPO. The decrease in grants receivable was driven by completion of certain grants and timing of grant drawdowns. The increase in prepaid expenses was due to prepayment of the D&O insurance policy. The increase in property and equipment was due to the purchase of lab equipment. The decrease in operating lease right-of-use assets resulted from the usage and payments of office space during the period.

Current wording

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

Previous wording

On December 31, 2024, the Company had working capital of $9,487,137, as compared to working capital of $(1,201,680) on December 31, 2023, reflecting an increase in working capital of $10,688,817. This increase in working capital was primarily the result of an increase in cash and cash equivalents due to the closing of the initial public offering. On December 31, 2024, the Company had cash of $9,719,310 available to fund its operation.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

In October 2024, the Company received an additional cost share grant from the Department of Defense (DOD) BioMADE initiative to help fund next steps toward cell-free biomanufacturing of isobutanol in the amount of approximately $1,000,000 against our own required expenses of an equal amount. The Company intends to pursue additional grants which will further improve its working capital position.

Current wording

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

Previous wording

For the year ended December 31, 2023, operating activities utilized cash of $1,180,870, which was driven by a combination of increased research and development activity, as well as increased general and administrative costs.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Grants that operate on a reimbursement basis are recognized on the accrual basis as revenues to the extent of disbursements and commitments that are allowable for reimbursement of allowable expenses incurred as of December 31, 2024 and 2023 and expected to be received from funding sources in the subsequent year. Management considers such receivables at December 31, 2024 and 2023, to be fully collectable, due to the historical experience with the Federal Government of the United States of America. Accordingly, no allowance for grants receivable was recorded in the accompanying consolidated financial statements.

Current wording

Grants that operate on a reimbursement basis are recognized on the accrual basis as revenues to the extent of disbursements and commitments that are allowable for reimbursement of allowable expenses incurred as of December 31, 2025 and 2024 and expected to be received from funding sources in the subsequent year. Management considers such receivables on December 31, 2025 and 2024, respectively, to be fully collectable, due to the historical experience with the Federal Government of the United States of America. Accordingly, no allowance for grants receivable was recorded in the accompanying consolidated financial statements.