EXOZYMES INC.

Overview

Chemicals are ubiquitous and fundamental to our modern life - they are the basic building blocks of medicines, fuels, plastics, food, and colors, among many other applications that together contribute to our ability to live “the good life” in the modern world.

Harvesting chemicals from nature via traditional extraction methods is often inefficient and often requires large amounts of biological material to extract the necessary amounts of the desired chemical compounds. So, despite maybe being sustainable, it is not enough to supply the world’s demand through natural extraction, and it is not as scalable as cost effective, or flexible as using petrochemicals from a manufacturing point of view.

Since the discovery of oil and advance of petrochemistry, the world has used petrochemical production methods to produce many desired chemicals—but petrochemical production is often toxic and environmentally damaging and, therefore, unsustainable. Furthermore, there is a limitation to what kinds of chemical compounds petrochemistry can efficiently produce, as nature is simply much more diverse and complex.

As a best-of-both-worlds solution for future chemical production, we at eXoZymes Inc. believe that we have developed unique technology that will allow us to harness more of the mechanisms nature uses for biochemical production. We foresee the technology we are developing will allow for a future where we can build new biosolutions that harness nature’s diversity but are designable and engineerable and, therefore, as scalable as petrochemical, all while being sustainable.

This introduces a paradigm shift in chemical production through the groundbreaking and sustainable production of highly valuable new chemicals (e.g., small molecules), such as active compounds in pharmaceutical drugs, new generations of nutraceuticals, or the core energy-molecules in biofuels. Just to mention a few of the at least 100s of potential application areas we foresee that our core technology can be used for eventually.

All application areas represent large potential business opportunities. Focusing our efforts will be key. Focus will come from getting the order of the different addressable markets right. Finding the lower hanging fruits that can help pay for the next version of the platform development will unlock more of the business opportunity.

We believe this could represent a paradigm shift in how humans get access to chemicals in the future by leveraging this new way of using AI-designed and highly engineered enzymes (called exozymes) that allows for a new generation of “cell-free” biosolutions. We project cell-free exozyme biosolutions are to become the next generation of synthetic biology (SynBio) biomanufacturing. SynBio offered a similar kind of vision for the future, but it has mostly failed. The main difference is that many of the synthetic biology technology problems are relate to scaling up production to commercially relevant quantities using living cells, whereas exozyme biosolutions avoids the cell-based problems and scaling challenges by liberating the enzyme based chemical-production-pathways from the cell. Simply put, most living cells are difficult to scale as they do not want to produce chemicals that they do not need themselves and, especially, not at industrially relevant amounts. Exozymes on the other hand, are not living organisms and therefore, more like chemistry, scales lineally.

In response to feedback from stakeholders and the ongoing need to clarify the specific type of “cell-free biomanufacturing” technology developed and utilized by eXoZymes Inc. that gives us our competitive advantages and allows for our unique use of AI, a rebranding effort was undertaken in February of 2025 to provide greater clarity around the core technology and to distinguish us from existing SynBio approaches. Because we consider our technology so foundational, differentiated, and full of potential, we believe existing terminology was insufficient to accurately describe it. As a result, the term “exozymes” was coined and introduced — not only as a rebranding effort, but also as the definition of this new biomanufacturing scientific and technology method. As such, Invizyne Technologies, Inc was rebranded to eXoZymes, Inc.

Biomanufacturing using exozymes, called exozyme biosolutions, when designed correctly and efficiently can convert affordable and widely available feedstocks into a broad spectrum of valuable chemicals. Our capability to develop exozymes biosolutions for products in the nutraceutical and pharmaceutical markets, as well as isobutanol for use in Sustainable Aviation Fuel, has already been successfully demonstrated by eXoZymes through multiple publications, internal use cases, and non-public pilot projects with potential partners.

The next part of our commercial journey is bringing the best exozymes biosolutions into production, so the relevant “nutraceuticals, with pharmaceutical potential” chemicals can go-to-market, and, that way, we can make the world realize over time that there is potential for a new and better way of making the chemicals that will enable humankinds ability to live “the good life” now and in the future.

What are exozymes?

Exozymes are advanced enzymes engineered with the aid of artificial intelligence and bioengineering to function in bioreactors outside of living cells. These exozyme-based systems, called biosolutions (e.g. exozyme biosolutions), have the potential to efficiently convert affordable and abundant feedstocks into a wide array of valuable chemicals, including small-molecules used as e.g. active pharmaceutical ingredients (APIs), nutraceuticals, and biofuels to list as a few examples.

The team at eXoZymes has over a decade of expertise in enzyme engineering, optimization and the design of multi-step exozyme biosolutions. In our approach we have integrated artificial intelligence, bioengineering, and biochemical pathway engineering, using feedback loops that utilize our ability to generate high-quality data within a state-of-the-art laboratory setting that allows us to design, test, scale and make biosolutions for commercial use. Drawing inspiration from the scientific breakthroughs recognized by four recent Nobel Prizes in Chemistry, combined with our proprietary development, IP and trade secrets, the technological platform and developments behind these state-of-the-art biosolutions represents a new frontier - the next generation of biomanufacturing.

By utilizing exozymes rather than traditional methods or enzymes, it also potentially becomes significantly easier to design, engineer, and implement an exozyme biosolution pathway to produce new nutraceuticals and pharmaceutical compounds with enhanced or tailored properties.

Research and Development Grants

eXoZymes, Inc has received US government grants, primarily from the Department of Energy (DOE) for work related to isobutanol, and cofactor development, as well as grants from the National Institutes of Health (NIH), for work relating to cannabinoids. This funding has allowed us to advance our technology, conduct research, help validate our processes, and advance the boundaries of scientific and technological advancement in our field.

eXoZymes, Inc has also received grants from two non-government sources. One of the grants was from the Gates Foundation for work on terpene synthesis. Terpenes are a class of natural products that display myriad properties and are used as flavors and fragrances but also make of the core of numerous pharmaceuticals. The grant amount was $50,000, and the work was completed at about the time of founding eXoZymes. The second grant was from Shell GCxN, received in 2023, which is under the Shell Game Changer Award program. The grant was used for our work on scaling up isobutanol production.

From inception through December 31, 2024, the Company has received grants totaling $13,639,011. In the past, both government funding and private funding have been important sources of funds for the operations of eXoZymes. There is no guarantee that we will continue to be able to draw on US government grants and private grants and that obtaining new grants has become challenging. However, we do now have a great starting point for a business with the first version of a unique technology platform that can allow us to create commercial value, with which we will continue to try to leverage grants as additional resources. If we are not able to obtain any new government and other grant funding after the funding we have already been granted runs out, we may have to limit our operations or may have to raise additional capital from other sources to maintain or further develop projects and capabilities at eXoZymes.

Commercialization Strategy and Focus

As already described, the potential applications of our technology are vast. Initially, we plan to focus on low-volume, high-value chemical compounds that will often be natural products or their derivatives— and whose primary product use cases will be as the active ingredients used in nutraceuticals, and preferably those that also have the potential to become active pharmaceutical ingredients (API).

We believe nutraceutical use-cases offer faster time to market with less cost and complexity (e.g. regulatory work), whereas the pharmaceutical use cases (that often require higher end-product purity, longer regulatory timelines, and/or additional engineering to produce specialized derivative-versions of compounds that have optimized pharmaceutical qualities) typically have a much higher upside potential but takes more time and higher costs to fully develop. The good news is that most of the work to develop exozyme biosolutions used in the production of nutraceuticals will be reusable and can serve as the foundation for their pharmaceutical business case. Therefore, focusing on developing nutraceuticals with potential as pharmaceuticals represents a risk-minimizing strategy and double-dip opportunity that amplifies the chance for positive outcomes and returns of investments.

In rare application cases, we may work on projects outside of the “nutraceutical-with-pharmaceutical-potential” focus in the 2025-2026 timeframe. We define these other potential projects as those projects with “extraordinary business opportunities,” and the only example at this time is our isobutanol program. In the case of isobutanol, the US government via the Department of Energy, has granted us non-dilutive resources to build an exozyme biosolution to produce isobutanol that can e.g. be used for Sustainable Aviation Fuel (SAF) and other sustainable biofuels and industrial chemical applications, where we get to keep almost all of the upside (IP, new technology and the business opportunities). With little upfront costs to us, almost no downside (e.g. research costs are covered to a large degree), and otherwise all upside, isobutanol is a good example of an “extraordinary business opportunity”.

Other potential “extraordinary business opportunities” may be found via sponsorships and grants. We believe that other companies have struggled to achieve market-relevant economics or feasibility using the SynBio or petrochemistry approach, but they might have already promised or primed the market for adoption without a viable solution to provide the product. Because it is possible that an exozyme biosolution can be built much faster and cheaper than their approach, they might be customers willing to make a deal with us such that the sufficient upside (e.g. project cost, IP rights, licensing, royalties) provides us with overwhelming motivation to pursue the opportunity, despite the target compound or market not being a part of our current focus.

After the initial 2025-2026 “nutraceutical-with-pharmaceutical-potential” focus period, we plan to reevaluate our focus and possibly expand our focus areas if we find it beneficial to do so at that time. Regardless of the specific application markets we will add in the future, we anticipate that partnerships will be essential. In future markets where eXoZymes can bring a competitive advantage (better product or feature, cheaper prices, significantly “greener”, lower setup cost etc.) due to our state-of-the-art (bio)manufacturing biosolutionsand a partner has established a viable commercial roadmap and access (such as a customer base, distribution networks, and market insights) a partnership will be optimal. Because we believe eXoZymes is fundamentally a platform company, collaboration with partners who possess deep knowledge and experience within specific markets and product domains can further benefit the platform by faster expanding our products and applications that if we tried to do it on our own.

Because eXoZymes is a young company, there are neither enough people nor capital currently available to pursue all potential markets independently. Therefore, we believe that without strong partnerships, the full promise of exozyme biosolutions would remain unrealized in our generation.

Previous Technologies and Their Limitations

Traditional production of fuels and chemicals has predominantly relied on two or three primary technologies; natural resource extraction, chemical synthesis, and more recently SynBio. Each method carries potential benefits but also significant drawbacks and notable limitations:

Natural Extraction: Many beneficial chemicals used by humans, such as vegetable oils, ethanol, perfumes, and pharmaceuticals originate from biological organisms (e.g. plants, microbes, etc). While these molecules can often be extracted from natural sources, many potentially useful chemicals are found in limited amounts in relation to biomass (e.g. at very low concentrations). Whether the natural source is enough for the commercial demand depends heavily on factors like crop yields, market demands and supply complexities, and geopolitical factors. Natural extraction is generally characterized as inefficient, especially when the desired molecule is only found in trace amounts in a plant or other organism. Processes that depend on natural extraction can require large amounts of energy and be very costly. Often, environmentally damaging solvents are used in the extraction process. When traditional methods of natural extraction are used, the method typically generates substantial amounts of waste product, which presents issues of local pollution and waste management. An additional limitation of natural extraction is an issue of the purity of the end-product, and in many instances the purification process will damage or destroy the molecule being sought or contaminants cannot be sufficiently removed. Achieving consistent quantity and quality are issues inherent to natural extraction. Using natural resources, such as plants, can also result in over harvesting with consequences to biodiversity, damaging land resources with negative impact on local income and related societal issues.

Chemical Synthesis: To circumvent the limitations of natural extraction, chemists have developed sophisticated methods for building molecules from simple petrochemical building blocks. Chemical synthesis is one of the most common methods of producing new molecules, and the chemical industry infrastructure is well-established globally. One of the major advantages of petrochemical synthesis is that it is highly scalable. However, traditional chemical production methods often suffer from substantive drawbacks such as high energy consumption, extraordinary and potentially dangerous operating conditions such as high temperatures or pressures, use of large volumes of toxic solvents (resulting in toxic waste), use of imprecise catalysts resulting in inefficient reactions, requiring extensive purification and associated costs, and each step in the synthesis usually requires different reaction conditions, making the process cumbersome and expensive, especially if pollution is seen as a cost, which is often a factor in determining the viability of an end-product. Generally, petrochemical processes are environmentally unfriendly, and especially the younger generations care deeply about that. In addition, side products and impurities can be difficult to separate from the desired chemical compound molecule; although some by-products are tolerated if they have their own commercial viability. Chemical synthesis also may have long and complex production cycles and can require enormous biomanufacturing equipment investments although this can sometimes be mitigated by the scales which petrochemical processes are deployed at.

Synthetic Biology (SynBio)/Metabolic Engineering of Cells: To provide alternatives to chemical synthesis and natural extraction, significant efforts have been made to bioengineer living biological organisms like yeast and bacteria to be able to convert simple biomass feedstocks into valuable chemicals. Synthetic biology (SynBio) seeks to genetically reprogram a living cell organism, into a “living chemical factory.” By DNA manipulation, SynBio tries to force the cell to produce the desired molecule end-product. The SynBio approach has some benefits over the other two methods mentioned above, but it has been more difficult than originally thought to realize economic production of end-products at scale in a timely fashion and at a reasonable cost. So far, achieving commercially viable production of chemicals using SynBio has been challenging, and most projects and companies trying to use SynBio for biomanufacturing have gone out of business. The failure of SynBio approaches can be a combination of many issues, including difficulty in keeping the host microbe alive, especially if the desired end chemical product or intermediate chemicals are toxic to the cell, and competing metabolism where other internal processes either compete for the starting material or the cannibalization of the product molecule for the cell’s own needs. These complications result in long and uncertain SynBio development cycles, low yields, high costs, and high failure rates. Overall, SynBio’s economic viability remains challenging, with the cost structures being influenced by research, development, scale-up processes, and expensive manufacturing. The collapse of SynBio industry stalwarts like Zymergen, Demetrix and Amyris is exemplary of these risks.

Our Next Gen Biomanufacturing Solution

We believe eXoZymes biomanufacturing platform is a distinct and more effective path to environmentally and commercially sustainable biomanufacturing compared to existing methods. Our approach avoids the complexity of engineering virtually uncontrollable living cells that historically have plagued SynBio efforts. Since living cell’s do not benefit from being used as “chemical factories”, they will fight back as if their lives depend on it. Rather than trying to engineer the enzyme pathways in the context of a living cell to produce a desired chemical, we remove cells from the equation by reconstituting stabilized enzymes (e.g. exozymes) cell-free. As a result, our cell-free approach has the potential to produce small molecule natural products efficiently and cost-effectively with enhanced control and shorter timelines. To produce small molecule natural products efficiently, we isolate the desired enzyme catalysts produced at high levels in industrial microbial hosts such asE.coli (bacteria) orP. pastoris(yeast), and then place the desired mix of exozymes in a bioreactor along with the feedstock (the basic raw material for the desired product), cofactors (a substance, other than the substrate, whose presence is essential for the activity of an enzyme or exozyme) and other proprietary elements required to make the desired product. The result is a biosolution that can be used to biomanufacture chemicals of interest, without the complications of living cells, while still having all the advantages and the sustainability of biology that drove the vision of SynBio.

We believe that using exozymes overcomes the scalability challenges that have historically limited commercial viability in the synthetic biology (SynBio) sector. By removing enzyme-catalyzed chemical reactions from the constraints of cellular environments, much higher titers, yields, productivities, and purity can be achieved. As such, we believe our technology, IP platform and partnership offerings represent the logical next generation of biomanufacturing, both in the short term for addressing nutraceutical markets with potential to access pharmaceutical markets and in the long term for larger commodity and specialty chemical markets, if and when depleting natural resources and/or pollution due to petrochemical processes makes their production challenging or unsustainable.

Moreover, eXoZymes’ platform offers potential access to chemicals and conversions that might be difficult or practically impossible to develop and manufacture using traditional SynBio or chemistry approaches.

We believe eXoZymes’s technology has the potential to overcome many of the inherent limitations and bottlenecks of currently used legacy technologies such as SynBio and petrochemistry. We think exozymes can enable the building of complex enzymatic pathways outside of cells that may operate with exceptional efficiency for long periods of time, thereby producing sizable quantities of the desired product at high purity, at a manageable cost.

We believe our approach enables:

Our Business Model

eXoZymes is a pre-revenue, development stage company focused on building a robust technology platform that can develop assets (spinouts, JV and licensing deals) that can be reapplied multiple times in different markets with only small changes, while maintaining and capturing new fundamental IP in each application. As a young company without a history of manufacturing, product development, or marketing endeavors, we seek partners with relevant manufacturing footprint and experiences to share costs, risks, and revenue related to the shared business opportunities that result from development and deployment of our exozymes based biomanufacturing solutions. Given the intricate nature and potential cost associated with developing and establishing biomanufacturing facilities for many kinds of chemical molecules, at different batch sizes, and types of feedstocks, we plan to employ a focused strategy which centres on nutraceuticals-with-pharmaceutical-potential, to align most of the biosolutions we develop and commercialize. We believe that focusing on nutraceuticals-with-pharmaceutical-potential will allow us to reuse as much knowledge and same batch size infrastructure as possible from multiple biosolutions, from the R&D stage all the way up to ongoing biomanufacturing production realities.

As a cash-flow-negative, early-stage development company, eXoZymes is highly focused on achieving its next value inflection point—where the public markets will acknowledge and appreciate the value of the assets and business cases we built—enabling us to secure additional capital and/or explore opportunities to sell or license our developed biosolutions.

Our initial business model will therefore look to commercialize (by way of spinouts, JV and licensing deals) the best and most mature biomanufacturing solutions for specific market applications (e.g. a specific nutraceutical)from our technology platform. As a result of getting things into licensing deals, JVs and spinout companies, it becomes easier to recognize the value of these new assets (especially as people will be able to study how those biosolutions can provide real and tangible competitive advantages in the specific markets) and how they can stand on their own as the chemicals in specific product offerings. We believe we have at least three ways of demonstrating and communicating asset value:

All three routes to commercializing assets described above can lead to clearly identifiable value through building specific assets as well as short-term and long-term revenue. Short-term revenue may be in the form of access fees to eXoZymes platform and IP, as an initial part of a partner deal, R&D fees, enzyme/exozymes sales, short term milestone payments. Long-term revenue may be in the form of licensing royalties and revenue sharing, and with time, sales of asset/ownership/exits.

While we believe some revenue might be generated from eXoZymes selling production of specialized enzyme/exozymes and/or selling development services, in the initial years we may not seek substantial profit margins from these services in the short-term to avoid it being something holding back deals and growth. We would rather make sure to enable the use of our biosolutions for specific markets and allow our platform to grow fast and achieve market acceptance, instead of optimizing short term profits for the sub-system components (e.g. selling specific enzymes/exozymes). However, adding fair levels of profit margin when possible, means certain services and specialized enzymes/exozymes hold significant medium- to long-term revenue potential. Given the short-term factors mentioned, investors and stakeholders should consider spin-outs, joint venture launches, and partnership deal announcements as key indicators of progress throughout the current and upcoming growth stages, instead of just short term revenue numbers.

Intellectual Property

We believe eXoZymes’ inventions cover a wide range of technologies and innovations related to biomanufacturing. These inventions include new chemical entities, composition of matter IP on novel and engineered individual enzymes with changes in stability, activity, specificity, or a combination thereof, as well as systems of enzymes designed for pioneering novel manufacturing processes. Additionally, our inventions include cofactor and metabolite management optimized for sustained reaction continuity, and advancements in enzyme expression strains and processes. We protect our technological edge through a combination of patent applications, trade secrets, and professional know-how and competitive advantages that only may be known by a subset of our corporate organization. At present, eXoZymes has a portfolio of patents and patent applications, filed in the United States and other countries, that are deemed relevant and are positive value vs the inherent cost. Additionally, we have several additional IP assets including invention disclosures and proprietary trade secrets. Included in our patent portfolio, is a license for a suite of patents from the Regents of the University of California, which safeguard different aspects of co-factor regeneration, cannabinoid biosynthesis, and engineered enzymes, from the work of our co-founders before the efforts was spun-out as the company we are today. We believe that our consolidated IP position and portfolio provides a defensible position that enables the creation of complex, robust, sustainable biosolutions enabling significant competitive advantages.

To provide a defensible position and foster innovation, we may establish research and development programs, that continues to ensure our lead position in this biomanufacturing technology vertical. Through those potential research and development programs we intend to further develop IP that will target the following domains:

Key terms of the license agreement with the Regents of the University of California

On April 26, 2019, we entered into a licensing agreement with The Regents of The University of California, through the University of California, Los Angles (“UCLA”). This agreement pertains to certain patent rights, notably encompassing: (i) pathway designs for the balance of co-factors in a cell-free system, and (ii) cell-free platform for the prenylation and a designed enzyme for cannabinoids biosynthesis. We hold a worldwide exclusive license to the valid claims of the patents held by The Regents and a non-exclusive license to the associated technology, with the right to sublicense, import, make, have made, use, provide, offer to sell, and sell all products derived from the technology covered by the license agreement. The licenses extend to affiliates of the Company. The Regents have retained the right for itself to use the patents for educational and research purposes, publishing and performing clinical diagnostic and prognostic services of its healthcare system.

The initial license fee was $6,000 and the continuing license maintenance fee is $2,500 per year. The license requires a minimum annual royalty, initially in the amount of $15,000 rising to $50,000 starting the third year of the license. eXoZymes is to pay The Regents a royalty on the net sales of licensed products equal to two percent with respect to therapeutics products, and one percent with respect to all other products, payable quarterly. To date, the Company has not developed products that have generated net sales on which a royalty is due. eXoZymes is also to pay an initial sublicensing fee equal to 15% which falls to 8%. There are additional milestone payments due based on net sales equal to $250,000 on the first $1,000,000 of net sales of an initial licensed product and then $350,000 when a second licensed product has $2,000,000 of net sales. The aggregate of payments made to the Regents in connection with our license agreement with the Regents, from 2019 to December 31, 2024, is $371,803. This includes payments for patent fees associated with the license and maintenance fees. In addition the Regents were issued an aggregate of 249,689 shares of the common stock of eXoZymes. The Regents have entered into a one-year market stand-off agreement with respect to its shares of Common Stock.

eXoZymes is required to use commercially reasonable efforts to achieve specified development milestones. If these are not achieved then The Regents has the right and option, at its sole discretion, to either terminate this Agreement or reduce the exclusive license to a nonexclusive license. We believe we have met the milestones, and retain the license on the exclusive basis. The term of the license is for 10 years after the first commercial sale of a licensed product that triggers an earned license fee. We are required to carry specified levels of insurance, maintain certain records and provide copies to The Regents of specific reports, and provide for certain ongoing patent costs.

Regulation

As eXoZymes continues to develop and optimize its exozyme-based biosolutions and their applications to make chemical products for use in the nutraceutical, pharmaceutical and isobutanol/biofuels industries, these products will require the Company to address regulation of different kinds. Depending on the particular product and marketing pathway, we may have to address regulatory compliance ourselves or we may be able to require a third party licensee to undertake meeting the regulatory requirements of our product as a stand-alone licensed product or in conjunction with their own product.

Cannabinoid Regulation

The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labelling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of chemicals such as those that we may develop. eXoZymes, or third-party contractors or licensees, may be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the United States and other countries for which we wish to conduct studies or seek approval of any of our clinical use or otherwise regulated products. Companies involved in the production of pharmaceuticals are also subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation: the federal Anti-Kickback Statute (“AKS”); the federal False Claims Act (“FCA”); the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.

Even where the particular product is only to be used topically or in edible products, the Federal Food Drug and Cosmetic Act, extends regulation to foods, dietary supplements, cosmetics and veterinary products. Nutraceuticals and e.g. Cannabinoids are used in a variety of topically applied lotions, salves, oils, sprays and transdermal patches. Cannabinoids, as an example of our nutraceuticals, are also found in products that one eats. State regulation in about half of the states of the United States extends to a variety of product attributes that include cannabinoids, including (i) the percentage of a cannabinoid that may be included in these kinds of products, (ii) warning labels, (iii) restrictions on packaging to protect children and child resistant packaging, (iv) application of general food safety regulations, such as food production, packaging and handling, (v) prohibitions on the kinds of products that can contain or be infused with cannabinoids, and (vi) the appearance of products that contain cannabinoids. Some forms of synthetic cannabinoids have been banned from being used in connection with human intended products.

New chemical small molecule compounds that go into foods or are used as dietary supplements, which have health claims attached, are subject to regulation as set forth in the U.S. Dietary Supplement Health and Education Act of 1994. The FDA does not approve dietary supplements, but it does regulate them for safety. As such, regulation would be under various FDA requirements and the New Dietary Ingredient notification process. However, if the molecule compounds are used in cosmetics, it does not require FDA approval prior to going to market, which is the same as for dietary supplements, as long as they have been tested for safety.

Specifically relating to tetrahydrocannabinol (THC, the gem dimethyl cyclized ether of cannabidiol specifically with a 5 carbon alkyl chain on the resorcyclic acid moiety) and its psychoactive derivatives, per 21 C.F.R. § 1308.11(d)(31) (7), if the small molecules are derivatives of THC, they may be subject to federal regulations. As such, this would require any such derivatives to follow the FDA Drug Development schedule for Clinical Trials. The FDA regulatory pathway for drugs would govern activities related to these compounds. However, if the compounds are not tetrahydrocannabinol analogs (e.g. the alkyl chain is less than 5 carbons or the compound contains a different cyclization pattern), then they would likely be subject to regulations set forth in the 2018 Farm Bill (and/or the U.S. Dietary Supplement Health and Education Act of 1994). For example, tetrahydrocannabivarin, which is a THC analog but with a 3 carbon alkyl chain instead of a 5 carbon, may or may not be subject to the 2018 Farm Bill if it is made synthetically as opposed to being extracted from the hemp plant.

The FDA and congress are continually updating their cannabis and cannabinoid policies, so we believe that regulations are likely to change. Other uses that are likely not subject to regulation (as long as it is not a THC analog as described above) by the FDA are cosmetics, supplements, and dietary aids as long as there are no health claims associated with the product, and they are safe as described above (or it is not a cosmetic/topical drug). Where cannabinoids are used as analytical standards or research aids, these would also not be regulated.

BioFuel Regulation

Numerous pieces of Federal legislation impacting the oil and gas industries have been passed by Congress over the last many decades. Some of these statutes include (i) the Interstate Commerce Act of 1887 that regulates interstate transportation of fuels, (ii) the Energy Policy Act of 2005 that outlines the incentives and benefits for oil and gas producers that help make the United States energy self-sufficient and also establishes the renewable fuel standard (RFS) program where gasoline must be blended with renewable fuel, (iii) the Clean Air Act, the Clean Air Act Amendments of 1990 and the Clean Air Act Extension of 1970, and subsequent amendments, dictate fuel standards, including banning leaded gasoline, and (iv) the Energy Independent and Security Act of 2007 that expanded the renewable fuel standard (RFS) program, in addition to increasing fuel economy standards. The Environmental Protection Agency (EPA) currently administers the RFS to impose an annual minimum volume of biofuels based on the estimated total volume of transportation fuels. Since the RFS indirectly subsidizes capital investment in the construction of biofuels plants, the RFS is expected to continue to stimulate and shape growth in the biofuels industry.

Governments at different levels in the United States have introduced various support policies to promote alternative and renewable energies. These policies aim to reduce greenhouse gas emissions and to improve energy security. Major policy initiatives include biofuel mandates and tax credits. It is widely expected that these policies will significantly affect both the environment and the economy of the United States. For example, biofuel production has effectively changed the role of agriculture by creating a linkage between the agricultural and energy sectors. Economic research indicates that the biofuel mandate has significantly affected agricultural commodity prices, which has caused a structural shift in land use and crop production.

For biofuel to be sold in the U.S. market, the fuel must meet certain quality specifications. In the United States, biofuel must meet the American Society for Testing and Materials (ASTM) requirements for biofuel fuel. There are similar standards in Europe. Additionally, standards and regulations also address safety related issues, which is in part under the purview of the Occupational Safety & Health Administration. All these standards, however, are in constant development and change, and are challenging the means of analysis, grouping and standardization. Biofuels have significantly different chemical compositions from hydrocarbons, which means different physical and fuel properties. Where hydrocarbon fuels have a very extensive system of industrial standards and testing, biofuel standards and testing methods are still being developed. Because biofuels are being created and developed at such a rapid pace and with ever greater complexity, the standards, testing and regulation is constantly evolving to keep up.

The properties of biodiesel, for example, depend on several factors, including the feedstock and the refining process. Producers who follow standard procedures to make the fuel, such as those of the Biodiesel Production Principles and Processes Guidelines and the ASTM, will have a better chance of producing fuel that meets the specifications for sale and use. The standards generally focus on (i) flash point, (ii) water and sediment, (iii) kinematic viscosity, (iv) sulfated ash, (v) sulfur, (vi) corrosion, and (vii) combustion, along with a significant number of additional criteria. Similar to biodiesel purchasers of other biofuels will also require testing and adherence to public standards and their own requirements and test their purchased biofuel product for meeting the various standards that exist and that may be established. For example, these standards are meant to provide quality specifications so that there are no adverse consequences from their use or inclusion in another form of fuel such as severe as engine seizure, filter plugging, and adverse emissions. It is expected that safety standards will also predominate regulation as biofuels gain use in more fuel products or energy supply systems.

As biofuels are developed and successive generations of production processes and products are created, we expect that environmental sustainability issues will be addressed and regulation will evolve. Biofuels are being promoted as a low-carbon alternative to fossil fuels as they could help to reduce greenhouse gas emissions and the related climate change impact from transport, among other uses. However, as there are concerns that their wider deployment could lead to unintended environmental consequences, it is expected that policies and forms of regulation or incentives will emerge to evaluate, monitor and control the broader impact of their use. To date, the findings about the impact and benefits of biofuels are often conflicting, with a wide variation in their conclusions. We believe that the studies and findings are highly situational and dependent on many factors, including the type of feedstock, production routes, data variations and methodological choices. Currently, there are studies that show that reductions in greenhouse gas emissions from biofuels are achieved at the expense of other impacts, such as acidification, eutrophication, water footprint and biodiversity loss. These will have to be addressed as the industry evolves, and processes will have to be developed to address these issues.

Competition

We believe eXoZymes stands at the forefront of multi-step cell-free biocatalysis aka exozyme system development for the production of diverse chemicals. While use of simple enzymes for single step conversions are commonplace in a variety of industrial processes, we believe the uniqueness of eXoZymes’s technology lies in its ability to build multi-step, complex, yet robust and efficient, enzyme modules and exozymes biosolutions to be used for biomanufacturing.

In the space of cell-based synthetic biology, considerable efforts have been, and are being, devoted to engineering living organisms to produce useful chemicals ranging from high-value natural products like cannabinoids to commodity products such as, fuels, plastics, and building block chemicals. Given the broad and growing attention to the environment and the environmental benefits of synthetic biochemistry, many players are attracted to the industry. Currently, there are many companies in the synthetic biology space and in the related application markets, including well-known firms operating in the industry segments of life science and biology solutions, pharmaceuticals, alterative meat, beauty, agriculture, automobile, fashion etc.. The number of companies and scope of industry segments touched upon demonstrate that this is an active, developing industry.

We believe that we will face competition from many companies and research institutions that are currently working in, and will enter, the future cell-free exozymes

industry to work on the many aspects of cell-free synthetic biochemistry. Debut Biotech and Solugen Inc. promote the advantages of cell-free enzymatic systems over cell-based systems, but their processes appear to use simple one to two step pathways. Codexis, Inc. partnered with Tate & Lyle and Merck & Co., Inc. on different, highly specific projects that use multi enzyme pathways, such as enzymatic Islatravir synthesis, illustrating the potential for complex enzyme cascades, but their principal mission diverges from the enzymatic manufacturing of more general chemicals. There are many companies that focus on enzyme engineering, such as Codexis, Inc., Allozymes Pte Ltd. (Singapore), Enzymit Ltd. (Israel and US), Zymtronix Catalytic Systems, Inc., Arzeda Corp. and Quantumzyme LLP (India). There are other companies that develop enzyme immobilization technologies. There are a number companies operating in the biofuels space, such as Valero Energy Corporation, ADM Corporation, Cargill Company, Gevo, Inc. and Butamax Advanced Biofuels LLC that focus on ethanol technologies.

Additionally, we believe that we will also compete against the numerous companies around the globe that dominate particular market segments for products made or sourced using synthetic chemistry or via natural extraction.

We believe that the majority of companies that present some aspect of competition are well established companies that have more experience identifying and carrying out the scientific development required of products that will be competitive to those of eXoZymes. Many of these companies have, and others that we anticipate entering the market in the future will have, greater financial and management resources, brand or scientific name recognition or industry contacts than we possess. A number of the companies are multinational companies, and many are also publicly listed companies, with large market capitalizations.

We believe that we compete with those firms based on a number of factors, including

We also believe eXoZymes will compete based on our unique technological approach. We believe our scientific approach and proprietary technologies are not as specialized and limited as those of our competitors, thereby opening product pathways for a plethora of more diverse chemical manufacturing applications. We believe that our intellectual property including our trade secrets, our special methods of doing e.g. recycling of essential cofactors may allow us to operate extensive multistep processes outside of a living cell, in a production-effective manner that will allow us to compete effectively. This example represents a competitive advantage over traditional synthetic biochemical companies.

In the biofuels sector, we do not compete directly with ethanol producers because our primary target, isobutanol, is widely regarded as a superior biofuel due to its higher energy density, than ethanol allows for, and the use of ethanol and isobutanol therefore is very different and distinct.

Employees and Facilities

eXoZymes’s forward-looking strategy anticipates upscaling in terms of both personnel and manufacturing capabilities over the coming years. We expect our expansion will span our operational segments, including business development, research and development (R&D), fermentation/enzyme production and pilot-scale chemical production.

As of December 31, 2024, eXoZymes boasts a dedicated team of approximately 31 full-time employees or equivalents. Among them, 11 hold doctoral degrees. Eighteen employees focus on R&D efforts, four are dedicated to pilot projects, while the remaining nine concentrate on business development, finance, and general administration. In addition to expanding our business development efforts, eXoZymes plans to expand both R&D and manufacturing scaling efforts, which will require us to bring on new hires in multiple departments. These hires will be responsible for sales efforts, pioneering processes, innovations, and ramping up production scales.

None of our employees are affiliated with labor unions or are part of a collective bargaining agreement. We believe we have a positive and harmonious work environment and our employee relations are good.

Facilities

Our headquarters and R&D facilities are currently located in Monrovia, California. We lease approximately 10,000 square feet of recently renovated space. Of the total space, a portion is reserved for R&D pilot activities and the balance of the space is split among the general and administrative office, R&D laboratory requirements, fermentation uses to develop and produce needed enzymes, and to house an analytical lab. The Company believes its existing facility is in good operating condition and suitable for its future operations

Legal Matters

We are not currently subject to any material legal proceedings. However, we may from time to time become a party to various legal proceedings arising in the ordinary course of our business.