eXoZymes Inc. Annual Report: A Performance Review

I’ve put together this guide to help you understand how eXoZymes performed this year. My goal is to turn complex filing data into clear information so you can decide if this company fits your investment goals.

1. The Big Picture

eXoZymes is a biotech company using "cell-free" technology. They use AI-engineered enzymes in a lab to create chemicals. By removing living cells from the process, they avoid common biotech problems like cell death or toxic waste. They are currently in the "lab-first" phase, proving their tech works before selling it. As of December 31, 2025, the company has earned zero revenue. They are strictly in the research and development stage.

2. The Money Talk: A Deepening Hole

The company is in a difficult financial spot. They spend much more than they make. Things remained challenging in 2025:

• Growing Losses: They lost $9.16 million this year, up 56% from their $5.86 million loss in 2024.
• Cash Crunch: They ended the year with only $3.04 million in the bank, down from $9.72 million in 2024. With a monthly burn rate of $600,000 to $750,000, they have less than six months of cash left.
• Survival Warning: The company officially stated there is "substantial doubt" about their ability to stay open. They lack the cash to survive the next 12 months without raising more money.

3. Strategy & Leadership: The "Stock-Pay" Trap

Leadership is tied to one firm: MDB Capital, which owns nearly 48% of the company. To save cash, the company pays its team with stock instead of salaries. This is a double-edged sword:

• Dilution: Every time they issue new shares to pay employees, your slice of the company gets smaller. The number of shares outstanding grew by 18% this year.
• Heavy Compensation: They spent $1.74 million on stock-based pay in 2025, accounting for nearly 19% of their total loss.
• New Grants: They continue to issue new stock options. In January 2026, they granted options for over 146,000 shares, which will further dilute shareholders over the next four years.

4. Fixed Costs: The Rent Burden

The company is locked into long-term lab leases in Los Angeles. They pay over $32,000 per month for a 12,000-square-foot facility. These leases run through 2028, creating a fixed cost of $384,000 annually, regardless of their research success.

5. The Risks: Why You Should Be Careful

• Financial Survival: With no revenue, they depend entirely on outside funding. If they cannot raise more money, they must stop operations.
• Tax Realities: They have over $5 million in tax losses. These are only useful if the company eventually makes a profit.
• Concentrated Power: MDB Capital controls nearly half the company. Retail investors have almost no power to influence decisions.
• Operational Fragility: They rely on one lab in California. If that facility shuts down, the entire company stops.
• Accounting Weaknesses: The company admitted their financial reporting controls are "not effective." They lack the staff to handle complex biotech accounting, which increases the risk of future financial errors.

Final Thought for Investors

When looking at a company like eXoZymes, the most important thing to weigh is the "burn rate" versus their ability to raise new capital. Because they have no revenue and are burning through their remaining cash quickly, they are in a race against time. Before considering an investment, ask yourself if you are comfortable with the high probability of further share dilution and the significant risk that the company may need to seek emergency funding just to keep the lights on.