EXOZYMES INC.

Previous wording

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. We have only a limited operating history and only have incurred losses to date. Therefore, there can be no assurance that the development efforts of eXoZymes will produce commercially viable processes or potential products, achieve market acceptance, or generate revenues that will sustain its business, despite that is what we are working hard to achieve. With a limited operating history, no marketing track record, and no commercialized products at this time, it will be difficult for investors to make predictions about the future success or even the viability of eXoZymes, and any predictions may not be as accurate as they could be if the Company had a longer operating history or a history of successfully developed, commercialized products and generating revenue from products.

Current wording

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

Previous wording

From inception through December 31, 2024, eXoZymes has received grants totaling $13,639,011. In the past government funding and private funding have been an important source of funds for the operations of the Company. There is no assurance that we will continue to be able to draw on any outstanding US government grants or other private grants or be able to obtain new grants. If we are not able to obtain government and other grant funding, we may have to limit our operations or may have to raise additional capital from other sources. Currently, we do not have any identified sources of funding. Other sources of funding may be dilutive to our shareholders or more costly than past sources of funding.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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. The exozymes platform and the limited number of products that we are developing are currently in various stages of research and development, limited pilot production phase and/or pre-clinical assessment as a therapeutic or product for other uses. It may be an issue that what is possible in the small quantities used at the research level cannot be replicated as production quantities are increased for testing and commercialization. Each product may be required to be progressively scaled up from early research production quantities to show the feasibility of production in larger quantities, whether for clinical evaluation, testing, and ultimately commercial manufacturing amounts before being made available to clients. As eXoZymes continues to develop and optimize its platform and processes to make what it has determined to be the initial potential products in the quantities needed for research, clinical or testing evaluation and manufacturing, there can be no assurance that such products will be understood, approved, or accepted by clients, regulators and potential investors, that the relevant platform and processes can be used for commercial manufacturing, or that it will be able to sell products at competitive prices and with features sufficient to establish demand and generate revenues or any level of profit. Another consideration if a product is a candidate as an active pharmaceutical ingredient, then it will require FDA and/or other applicable regulatory approvals, including manufacturing approvals, which may not be obtainable. If it is unable to convince potential clients of the utility, approvability and value of its products, it will not be successful in entering the markets that it has identified, and its business and results of operations will be adversely affected.

Current wording

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

Previous wording

We anticipate, because some of the compounds are unique, that eXoZymes will face all the hurdles of a new technology in a marketplace. Depending on the use of the compounds, eXoZymes may have to comply with the extensive array of medical and other areas of regulation depending on the use of the particular compound. In addition, it anticipates having to conduct many forms of tests, data generation and analysis to convince regulators, commercialization partners and potential users of the safety, uses, and claim validation to be able to get relevant approvals, commercialize and gain market acceptance for its chemical compounds. If it is unable to successfully justify the efficacy, safety and potential of its compounds, or do so in a timely manner, it will not be able to successfully develop its business and may have to curtail or cease its business. Holders of our shares of Common Stock may lose value in their holdings.

Current wording

We anticipate that, because some of the compounds are unique, eXoZymes will face all the hurdles of a new technology in the marketplace. Depending on the use of the compounds, eXoZymes may have to comply with the extensive array of medical and other areas of regulation depending on the use of the particular compound. In addition, it anticipates having to conduct many forms of tests, data generation and analysis to convince regulators, commercialization partners and potential users of the safety, uses, and claim validation to be able to get relevant approvals, commercialize and gain market acceptance for its chemical compounds. If it is unable to successfully justify the efficacy, safety and potential of its compounds, or do so in a timely manner, it will not be able to successfully develop its business and may have to curtail or cease its business. Holders of our shares of Common Stock may lose value in their holdings.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

We believe that we will face competition from many companies and research institutions that are currently working in, and will enter, the industry to work on all the many aspects of cell-free synthetic biochemistry. Debut Biotech and Solugen Inc. promote the advantages of cell-free enzymatic systems over cell-based systems, but their processes appear to use simple one to two step pathways. Codexis, Inc. partnered with Tate & Lyle and Merck & Co., Inc. on different, highly specific projects that use multi enzyme pathways, which demonstrate that enzymatic Islatravir synthesis illustrates the potential for complex or longer enzyme cascades of the type used in some of our eXoZymes systems, but their principal mission diverges from the enzymatic manufacturing of more general chemicals. There are many companies that focus on enzyme engineering, such as Codexis, Inc., Allozymes Pte Ltd. (Singapore), Enzymit Ltd. (Israel and US), Zymtronix Catalytic Systems, Inc., Arzeda Corp. and Quantumzyme LLP (India), Adaptyv (Switzerland), Zymvol (Spain). There are other companies that develop enzyme immobilization technologies. There are many companies operating in the biofuels space, such as Valero Energy Corporation, ADM Corporation and Cargill Company and Gevo, Inc. and Butamax Advanced Biofuels LLC that focus on ethanol technologies.

Current wording

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

Previous wording

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. We also believe we compete based on our unique technological approach. We believe our scientific approach and technology is not as specialized as those of our competitors, thereby opening product pathways for a plethora of more diverse chemical manufacturing applications. We believe that our intellectual property on recycling of essential cofactors will allow us to operate extensive multistep processes outside of a living cell. This represents a competitive advantage over traditional synthetic biochemical companies. In the biofuels sector, because isobutanol is our primary target due to it being widely regarded as a superior biofuel, we do not compete directly with ethanol producers.

Current wording

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

Previous wording

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. Additionally, our intellectual property includes cofactor and metabolite management optimized for sustained reaction continuity and advancements in enzyme expression strains and processes. Also, metabolites resulting from the degradation of a molecule, can be used as a fingerprint or to identify those parts of a molecule that can modify the speed of or stop an enzyme reaction, and which we can then use to manage the reaction timing of our platform.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

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.

Previous wording

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. In addition, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations impose various requirements on listed public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our board of directors, management and other personnel 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.

Current wording

As a public company listed in the U.S., we incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations impose various requirements on listed public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our board of directors, management and other personnel must devote a substantial amount of time to these compliance requirements. Moreover, these rules and regulations have substantial legal and financial compliance costs and will make some activities more time-consuming and costly.

Previous wording

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. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we 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. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe, that our internal controls over financial reporting are effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Current wording

Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we are required to furnish a report by our board of directors on our internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we engage in a process to document and evaluate our internal controls over financial reporting, which is both costly and challenging. In this regard, we dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe, that our internal controls over financial reporting are effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Previous wording

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

Current wording

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

Previous wording

It may be time consuming, difficult, and costly for the Company to develop and implement the internal control and reporting procedures required by the Exchange Act. The Company, at this time, will need to hire additional financial reporting, internal control, and other finance personnel in order to develop and implement appropriate internal control and reporting procedures. If we are unable to comply with the internal control over financial reporting requirements of the Exchange Act, then we may not be able to obtain the required independent accountant certifications, which may preclude us from keeping our filings current with the SEC. Further, a material weakness in the effectiveness of internal control over financial reporting could result in an increased chance of fraud, reduce our ability to obtain financing, and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations, and financial condition.

Current wording

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

Previous wording

We rely exclusively on a single laboratory location for our operations, research, and development activities. This concentration of resources presents a significant risk to our business continuity. If our primary 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.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Certain recent initial public offerings of companies with relatively small public floats have experienced extreme volatility that was seemingly unrelated to the underlying performance of the company. Our Common Stock may potentially experience rapid and substantial price volatility, and price decline, which may make it difficult for prospective investors to assess what we believe to be the value of our Common Stock.

Current wording

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

Previous wording

In addition to the general volatility risks, our Common Stock may be subject to rapid and substantial price volatility and/or a decline in the market price. We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Stock. Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively small public floats. As we anticipate having a relatively small public float, the Common Stock may experience greater stock price volatility, extreme price run-ups, rapid declines in the price, lower trading volume, large spreads in bid and asked prices, and less liquidity than large-capitalization companies. The aspects of the trading in the Common Stock may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the value of our Common Stock. Because of the low public float and the absence of any significant trading volume, the reported prices may not reflect the price at which an investor would be able to sell shares if it wants to sell any shares or buy shares if it wishes to buy share.

Current wording

In addition to the general volatility risks of the stock market, our Common Stock may be subject to rapid and substantial price volatility and/or a decline in the market price. We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Stock. Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility in the stocks of emerging growth companies, especially among companies with relatively small public floats. As we anticipate having a relatively small public float, the Common Stock may experience greater stock price volatility, extreme price run-ups, rapid declines in the price, lower trading volume, large spreads in bid and asked prices, and less liquidity than large-capitalization companies. These aspects of trading in Common Stock may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the value of our Common Stock. Because of the low public float and the absence of any significant trading volume, the reported prices may not reflect the price at which an investor would be able to sell shares if it wants to sell any shares or buy shares if it wishes.

Previous wording

If the trading volumes of our Common Stock is low, persons buying or selling in relatively small quantities may easily influence the prices of the Common Stock. A low volume of trades could also cause the price of the Common Stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of the Common Stock. The volatility also could adversely affect the ability of the Company to issue additional shares of Common Stock or any other securities and the ability to obtain stock market based financing in the future. No assurance can be given that an active market in our Common Stock will develop or be sustained.

Current wording

If the trading volumes of our Common Stock are low, persons buying or selling in relatively small quantities may easily influence the prices of the Common Stock. A low volume of trades could also cause the price of the Common Stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of the Common Stock. The volatility also could adversely affect the ability of the Company to issue additional shares of Common Stock or any other securities and the ability to obtain stock market-based financing in the future. No assurance can be given that an active market in our Common Stock will develop or be sustained.

Previous wording

All decisions with respect to the management of the Company will be made by our board of directors and our officers. MDB Capital Holdings, LLC, as of the date of this report beneficially owns 48.38% of our common stock. Mr. Christopher Marlett and Mr Anthony Digiandomenico, directors of the Company, are principals of MDB Capital Holdings, LLC. Mr. Christopher Marlett, our Chairman of the Board is also a Director of MDB Capital Holdings, LLC and has significant voting authority over the securities owned by MDB Capital Holdings, LLC. As of the date of this report, management beneficially owns approximately 70.94% of our issued and outstanding shares of Common Stock, which includes 28.38% of MDB Capital Holdings, LLC ownership. It is expected that these persons will have aligned interests, and, therefore, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, the management team, amendment of our articles of incorporation and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of the company or changes in management, in each case, which other stockholders might find favorable, and will make the approval of certain transactions difficult or impossible without the support of these significant stockholders.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Now that we are a publicly traded company, we may have an increased risk of securities class action litigation.

Current wording

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

Previous wording

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

Current wording

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