Those who follow Slack Capital are already aware of my extremely bullish stance on eXoZymes, and the Q3 call held last Thursday has only reinforced that conviction. The risk-reward for what I see as a genuinely rare, once-in-a-lifetime biotech investment opportunity has somehow become even more compelling.

• eXoZymes’ Q3 INVESTOR CALL

For those new to eXoZymes, I’d strongly recommend understanding the underlying technology and business model before diving into the details of this update. My two reports on the company serve as a starting point:

• EXTENSIVE INTRODUCTION TO EXOZYMES

• SNAPSHOT INVESTMENT REPORT

For investors initiating a position or actively following the story, I also invite you to join the DEDICATED EXOZYMES CHANNEL.

Below are the seven key takeaways from the call.

1 – DUAL-MARKET ASSET DESIGN TO MAXIMISE VALUE AND REDUCE RISK

Each of eXoZymes’ extraordinary business cases are intentionally designed to target at least two high-value markets, maximising the value from the same underlying R&D while creating multiple monetisation pathways.

The most compelling program, N-trans-caffeoyltyramine (NCT), is being advanced for both the nutraceutical and pharmaceutical markets. On the nutraceutical side, eXoZymes is targeting a near-term commercialisation opportunity by positioning NCT as an over-the-counter (OTC) supplement for metabolic, longevity, and gut health support, with first revenues projected from Q1 2027 onwards. In parallel, the NCT pharmaceutical analog program will follow a longer development and regulatory journey. If key preclinical and clinical milestones are achieved over the next 3-5 years, this program could support a potential multi-billion-dollar exit. Together, these two distinct target markets dramatically improve NCT’s overall risk-return profile.

On the investor call, management stated that they plan to apply this same selective approach to future extraordinary business cases. Each new asset will be identified and designed to enable the fundamental R&D efforts to open more than one market segment. This maximises the value created from every R&D dollar spent, establishing an inherently diversified product portfolio and lowering each program’s overall development risk.

The dual-market approach also provides various strategic deal structures depending on the market opportunity, including spin-out vehicles such as NCTx for the NCT nutraceuticals opportunity or structured joint ventures. This allows eXoZymes to selectively partner with organisations that have distinctly complementary skill sets for that compound’s journey to commercial readiness.

2 - DISCIPLINED FOCUS TO BUILD A REPEATABLE COMMERCIALISATION PLAYBOOK

While eXoZymes’ platform has the potential to disrupt hundreds of chemical manufacturing processes, the Q3 investor call reinforced management’s disciplined, capital-efficient near-term strategy. The company is concentrating its efforts on its three core extraordinary business cases: NCT, non-intoxicating cannabinoids and Santalene.

Following the Pareto Principle approach, which focuses on the 20% that can deliver 80% of the value, ensures that eXoZymes directs resources into the highest-leverage opportunities and avoids diluting capital, management attention and technical focus across lower-priority projects.

By narrowing its focus, eXoZymes is also building the company’s internal playbook. Each extraordinary business case provides real-world, practical lessons in scale-up, manufacturing pathway development, regulatory planning, IP strategy, partnership negotiation and techno-economic model design to name a few key areas. Together, these learnings create a repeatable commercialisation framework for future development programs, ensuring they can be advanced faster, at lower cost and with higher probability of commercial success.

With key milestones and potential partnership announcements expected over the coming months, 2026 is shaping up as the year in which the foundations for future commercial success are laid. Once the three core extraordinary business cases have progressed through this critical development phase, 2027 and beyond should see a rapid rollout of additional programs and a meaningful expansion of the company’s value as the broader pipeline begins to commercialise.

3 - NCTX ON TRACK FOR Q1 2027 REVENUE, TARGETING US$200B+ WELLNESS MARKET

During the call, management provided a detailed update on NCTx, the purpose-built vehicle that holds the licence for eXoZymes’ NCT OTC applications.

eXoZymes has developed a biomanufacturing solution for NCT that overcomes the fundamental supply constraint of the highly valuable compound. NCT occurs only in trace amounts (0.014%) in hemp seeds, with prior attempts to synthesise the compound failing despite years of effort and millions of dollars invested by other companies. In just five months, eXoZymes had demonstrated production of 4 grams of NCT at 99% purity and 96% yield. To obtain the same amount of the compound from natural extraction would require approximately 25 kilograms of hemp seeds, or around 1,600 hemp plants.

Scientific literature indicates that NCT has genuine efficacy across the three pillars driving current wellness market growth, including longevity support (mitochondrial function), metabolic health (fat burning and energy production) and digestive health (gut barrier integrity). These three pillars together represent a substantial, fast-growing global wellness market worth over US$200+ billion. This positions NCT directly within the highest-demand segments of consumer health.

Given the size of the NCT OTC opportunity, eXoZymes has already attracted significant interest from more than 42 parties spanning CMO providers, formulation companies and global supplement brands.

On the Investor Call, eXoZymes confirmed that its 100x NCT OTC scaling campaign is on track, with results expected in December. This will be a major de-risking milestone, enabling eXoZymes to start sending product samples to global supplement formulation partners.

Management also clarified why they are not rushing to sign partnership deals at this current stage. They see far greater value in advancing NCTx’s technical and commercial readiness before bringing partners in. Damien Perriman, eXoZymes’ CCO, outlined a 12-month development plan for NCTx during 2026, including optimisation of the synthesis module in Q1, tech transfer to a contract manufacturing organisation (CMO) in Q2, and initiation of commercial-scale production in Q3. Reaching these milestones should significantly strengthen NCTx’s negotiating leverage and valuation.

Perriman also presented sales projections for NCT OTC from 2027 onwards, with expected rapid uptake through 2030, suggesting between 3-9 million bottles sold annually. At an illustrative price of US$50 per 30-capsule bottle, this could equate to US$150-450 million per year. Importantly, eXoZymes’ cell-free production approach is modelled to be around 3x cheaper than fermentation-based methods, supporting attractive margins and competitive pricing.

4 - NCT PHARMA TARGETING A POTENTIAL MULTI-BILLION-DOLLAR EXIT IN 3–5 YEARS

Beyond the near-term NCT OTC opportunity, the Q3 Investor Call confirmed that eXoZymes has formally begun the development of a portfolio of NCT Pharmaceutical analogues, potentially unlocking an even greater value proposition over the medium to long-term.

The pharmacological foundation of the NCT OTC and Pharma programme centres on HNF4-alpha activation, a liver nuclear receptor that has historically been difficult to target therapeutically. As potent HNF4-alpha agonists, NCT pharma analogues could address some of the world’s most prevalent and rapidly growing metabolic diseases, including non-alcoholic fatty liver disease (NAFLD), metabolic-associated steatohepatitis (MASH) and obesity. The TAMs for these indications are enormous, estimated at US$100+ billion.

eXoZymes’ technical advantage lies in its ability to synthesise new-to-nature compounds from the natural NCT molecule backbone. This allows the company to design analogues with enhanced pharmacological activity, reduced side effects, improved stability and strong composition-of-matter IP. Critically, these candidates could occupy a greenfield space, as there are currently no selective HNF4-alpha agonists that have achieved clinical approval.

Similar to NCTx’s structure, which holds the licence for NTC OTC, eXoZymes plans to establish a dedicated entity that houses the NCT Pharma asset. As this entity progresses through key technical milestones, its value should increase, at which point eXoZymes intends to partner with organisations capable of advancing the NCT analogues through the full preclinical and FDA clinical development pathway.

Management has indicated that the NCT pharma entity could support a potential exit in the billion-dollar range within 3-5 years. Recent M&A activities support this view, with Novo Nordisk acquiring Akero Therapeutics for US$5.2 billion in Phase 3 for its experimental MASH drug. Additionally, both Novo Nordisk and Pfizer have active acquisition offers of US$10 billion for Metsera’s Phase 1/2 Obesity drug.

As the NCT Pharma entity will license the core IP from eXoZymes, once sold eXoZymes will still likely receive ongoing licensing revenues linked to production and/or sales of any approved NCT analogues.

5 - NON-INTOXICATING CANNABINOIDS TARGETING US$5.3B+ PHARMA MARKETS

eXoZymes’ second extraordinary business case centres on non-intoxicating, cannabinoid-like molecules, an area where the company’s platform has a distinct technical and regulatory advantage.

Traditional plant-based cannabinoid extraction methods yield complex mixtures of 200+ cannabinoids, containing only trace amounts of rare molecules, which are often co-purified with THC, a Schedule I compound, thereby complicating both purification and federal compliance. Similarly, the limited availability of rare cannabinoids has prevented researchers from understanding which specific cannabinoid molecules drive which biological effects, thereby limiting relevant therapeutic development.

By contrast, eXoZymes’ platform can produce these rare cannabinoids in pure form at an industrial scale, and can also synthesise new-to-nature cannabinoid analogues with zero THC levels. These analogues would share the core chemical scaffolding but differ at specific positions, allowing optimisation of activity while preserving familiarity with the body’s natural endocannabinoid system.

During the Investor Call, management discussed how these non-intoxicating, cannabinoid-like molecules have major pharmaceutical applications in obesity and pain, with a TAM of US$5.3 billion. eXoZymes is one of the few organisations to have received US federal grant funding for cannabinoid research, given that the company can produce cannabinoids with guaranteed zero THC levels, removing the Schedule I restrictions that normally block cannabinoid research at the federal level.

eXoZymes is already in active Joint Venture discussions with various globally leading specialist partners whose capabilities could unlock significantly more value and help ensure the successful commercialisation of the cannabinoid-like program.

6 - DISCIPLINED CAPITAL STRATEGY TO MAXIMISE SHAREHOLDER VALUE

eXoZymes ended the quarter with US$5.1 million in cash and a quarterly net loss of US$2.29 million. The current cash balance provides a runway into early Q2 2026, giving the company time to deliver several key value-inflection milestones.

As previously discussed, eXoZymes has adopted a disciplined capital allocation strategy, supplemented by meaningful non-dilutive government funding. To date, the company has received over US$17 million in grants, which have been instrumental in building its platform. More recently, eXoZymes secured a US$3 million NSF Meta-PURE grant to fund its extraordinary business case in Santalene production, without having to self-fund the program. The company continues to actively pursue additional grant opportunities.

The initial strategic partnerships model for its extraordinary business cases also reduces capital intensity. Rather than paying service providers for their services, eXoZymes intends to offer equity stakes in the relevant licensing entities. At this early stage of the company’s development, this is a highly efficient approach, allowing eXoZymes to avoid major costs associated with taking a compound to commercial readiness, such as CAPEX-heavy facility build-outs.

Given its current cash balance and burn rate, management has been clear that a capital raise is expected in the near term. eXoZymes has explicitly stated its desire to minimise shareholder dilution, particularly at current valuations, so only a modest raise is anticipated.

The company has already been approached by more than 15 institutions, with a range of proposals. Guided by its capital markets adviser, MDB Capital, eXoZymes is focused on securing the best possible terms for the company and its shareholders. With multiple catalysts over the coming months, potential partnership announcements and an extremely thin sell-side, there is a reasonable prospect that any raise could be completed at a higher valuation than today’s share price. The current share count stands at 8.38 million shares, with a total diluted share count of 11.16 million.

Given that 72% of the company is held by insiders amd existing retail investors are holding tight with trading showing sharp price movements on low volume, a capital raise would likely represent one of the few opportunities for new investors to accumulate a large position.

7 - CMOS CONFIRM EXISTING INFRASTRUCTURE IS READY FOR DEPLOYMENT

One of the most significant, and perhaps under-appreciated, points from eXoZymes’ Q3 Investor call was the update on the company’s engagement with external contract manufacturing organisations (CMOs) for NCT OTC scale-up.

During the quarter, eXoZymes contacted 11 CMOs to assess whether they already had the infrastructure required to operate eXoZymes’ NCT OTC platform. All 11 CMOs confirmed that they do. This is a highly material point and strongly validates the capital efficiency of eXoZymes’ scale-up requirements.

Traditional biomanufacturing platforms often require bespoke production facilities, which limits partner optionality and pushes companies towards CAPEX-heavy builds or a narrow set of large partners. By contrast, eXoZymes’ platform can run on standard bioreactor infrastructure, as the technology’s key differentiation sits in the inputs (substrates, engineered enzymes, process design, etc), not in any unique hardware.

Because the required equipment is already installed at existing CMO facilities, scaling future compounds also becomes a matter of routine deployment rather than infrastructure innovation. eXoZymes’ model provides substantial operational flexibility, dramatically reduces CAPEX and offers a clear, lower-risk path to global-scale production for current and future assets. With 11 qualified CMOs at hand, eXoZymes also has substantial negotiating leverage when it comes to selecting partners and structuring deals.

EXTENSIVE INVESTMENT REPORT ON EXOZYMES

eXoZymes Snapshot

eXoZymes Inc. (NASDAQ: EXOZ) is a biomanufacturing technology company that has developed an advanced ‘cell-free’ biomanufacturing platform. After a decade of R&D, the company is now transitioning from technology development to commercial deployment, targeting the production of compounds with multi-billion-dollar market potential.

eXoZymes has innovated an entirely new method of making chemicals by taking enzymes, the ‘molecular workers’ inside cells, and engineering them to operate outside a cell. This first-of-its-kind, exclusively patented ‘cell-free’ approach overcomes the significant limitations of cell-based methods, such as low production yields, difficulty in scaling and slow R&D cycles.

The company combines its proprietary enzymes, cofactors and reagents in precisely engineered pathways, converting feedstocks like glucose into high-value chemicals within relatively standard bioreactor infrastructure. Each biological input and bioreactor condition (pH, temperature, etc.) is optimised for peak performance, and eXoZymes has repeatedly demonstrated the effectiveness of its platform with a recent compound achieving a 96% production yield with a 99% purity.

The platform’s biochemical processing capabilities enable the production of difficult-to-extract natural compounds as well as entirely new-to-nature molecules, where minor changes to conversion pathways can lead to completely different outcomes. This ability unlocks significant commercial opportunities, enabling the development of high-value compounds for partners, particularly in the nutraceutical and pharmaceutical sectors.

Next-Generation DBTL Cycle

In addition, eXoZymes holds an industry-leading advantage with its rapid Design–Build–Test–Learn (DBTL) cycle, integrating AI, computational protein design and high-throughput experimentation to run hundreds of automated experiments in parallel, reducing R&D efforts from years to weeks and significantly reducing compound development costs.

As the platform functions like a controlled chemical reaction with no cell-based components, each DBTL cycle generates extensive datasets that continuously feed eXoZymes’ AI model. As this data accumulates, it drives a feedback loop that iteratively improves the platform’s performance.

As a result, eXoZymes has demonstrated over 80% enzyme stability gains within 3 weeks, compared to just 20% over 4 months using traditional methods. Enzyme activity can also be increased 4x over 3 weeks, while cycle time can be reduced from 5 days to just 2. This proprietary system significantly enhances the company’s biomanufacturing capabilities, increases production titres and yields, and improves the overall economic viability of a compound’s production.

Unlocking Real World Applications

NCT is among the first publicly disclosed compounds in active development. Found in trace amounts (0.014%) within hemp seeds, NCT has remained commercially unavailable, despite its considerable nutraceutical and pharmaceutical potential. Preclinical data suggests NCT may help address fatty liver disease, a condition affecting 30% of the global population and representing a US $17.6B market with no existing therapeutic solutions. NCT has also been shown to support gut barrier function and mitochondrial activity, both representing substantial opportunities.

In an industry first, eXoZymes made 4 grams of pure NCT in a single production cycle. This compound progressed from ideation to lab validation in 6 weeks, followed by 5 months of consistent platform performance and development of a techno-encomic model, all at a fraction of typical SynBio R&D cost. For comparison, extracting the same amount of NCT would require 25kg of hemp seeds or ~1,600 plants.

eXoZymes is also developing NCT pharmaceutical analogues, aiming to boost the compound’s therapeutic efficacy and unlock even greater commercial potential. Building on this momentum, the company is preparing to scale its NCT production 100x over the coming months while actively engaging potential commercial partners.

Another compound that has been publicly disclosed is santalene, a high-value molecule with aromatic, medicinal and pharmaceutical applications. Santalene also occurs in trace amounts, making up 1–3% of sandalwood oil, which itself represents 3–6% of heartwood mass. eXoZymes preliminary R&D results are expected to be announced early next year.

Beyond these compounds, eXoZymes has also demonstrated the platform’s production capabilities of Terpenes (2017), CBGA (2020) and Isobutanol (2020). Notably, these results were achieved years before the platform achieved significant performance improvements.

Together, these initial compounds highlight the transformative power of eXoZymes’ platform, capable of developing 100s of high-value compounds previously inaccessible, while drastically reducing R&D time and cost. This impact will only grow as the company’s proprietary DBTL cycle evolves and new technological advancements are integrated into the platform.

Commercial Strategy

Building on these groundbreaking results, eXoZymes is now moving from platform validation to active commercialisation, initially targeting high-value nutraceuticals with pharmaceutical potential, and extraordinary business cases (Isobutanol).

Nutraceutical and pharmaceutical compounds typically require relatively low production volumes, often just a few kilograms per year, while carrying significant commercial value. These volumes align with eXoZymes’ current manufacturing capabilities, enabling the company to extensively validate its platform at a smaller scale before before scaling production to hundreds of kilograms at partner-operated facilities.

At its core, eXoZymes is a R&D company and does not intend to operate large-scale production facilities, which require substantial capital investment and carry operational risk. Instead, the company intends to commercialise its technology through spin-outs, joint ventures and licensing agreements, partnering with organisations capable of scaling its manufacturing platform.

The platform’s capabilities have already attracted significant industry interest, with over 130 active engagements and 3 companies now in the final stages of negotiating commercial deals.

Spin-Outs

This occurs when eXoZymes identifies a compound with strong demand, premium pricing and limited supply, presenting a clear opportunity for its platform. The company then demonstrates viable compound production, establishes a wholly owned subsidiary and spins it out, selling a partial equity stake to a partner who will be responsible for global sales and distribution.

eXoZymes recently launched its first spin-out, NCTx, which holds ownership of its NCT compound.

Joint-Venture

Unlike spin-outs, where partners are brought in once a compound is approaching its maximum value, JVs involve partners earlier in the development cycle. This early collaboration accelerates commercialisation, spreads risk and can significantly enhance the compound’s overall value.

In April, eXoZymes indicated that its first JV could be signed later in the year, likely with a global leader in the nutraceutical/pharmaceutical sector.

Licensing Agreements

Following several successful compound launches through its platform, eXoZymes will start to license its IP, enabling external partners to integrate the technology directly into their chemical manufacturing operations.

The company will continue R&D on compound development and platform optimisation, while earning upfront and milestone payments as it achieves specific R&D goals. For example, in 2021, Ginkgo Bioworks received a $5 million upfront payment, with potential milestones up to $115 million through a collaboration with Biogen.

Once the platform is operational and the partner is producing the defined compound, eXoZymes may also earn royalty payments, typically 3–8% depending on the compound. This pick-and-shovel model is highly profitable, requiring minimal capital expenditure while delivering high profit margins, as demonstrated by companies like ARM Holdings (US $151B).

Market Applications

Nutraceutical Ingredients - TAM US $105 B

Compounds that provide a targeted blend of nutritional and health benefits, often extracted or synthesised from various plant-based feedstocks. A single compound can be frequently used across multiple products, providing attractive commercial deal opportunities.

Active Pharmaceutical Ingredients - TAM US $255 B

The bioactive compounds in pharmaceutical products responsible for the intended therapeutic effects. Requires ultra-pure compounds, which are later formulated into targeted final products.

Energy Transition/BioFuels - TAM US $167 B

Low-carbon liquid fuels and blending compounds produced from organic materials. eXoZymes’ initial focus in this market is Isobutanol, which has attracted considerable interest in the Sustainable Aviation Fuels sector.

Food Flavours, Fragrances and Cosmetic Ingredients - TAM US $71 B

Industrial & Specialty Chemicals - TAM likely reaching trillions of dollars

Supporting Investment Drivers:

• The company holds a comprehensive patent portfolio and was the first to develop an Exozyme biomanufacturing platform, creating a strong barrier of entry for competitors.

• Several undisclosed compounds are being actively developed, targeting multi-billion-dollar opportunities, particularly in the high-value nutraceutical and pharmaceutical sectors.

• The company has secured numerous government grants, reflecting recognition of the platform’s strategic importance in advancing the US biotechnology sector.

• High-profile industry executives have joined the team, reflecting confidence in the platform’s capabilities and increasing the likelihood of commercial success.

• The company maintains a disciplined capital approach, prioritising high-impact projects and operational efficiency prior to scaling its platform.

Investment Opportunity

Shares in eXoZymes ($EXOZ) are tightly held, with founders, insiders and institutions holding over 68% of the stock. The company remains largely under the radar with low trading volume, even as its commercial pipeline rapidly advances. My extensive investment report is among the first major coverages of eXoZymes, highlighting a compelling investment opportunity.

Yet, it is important to recognise the market’s general hesitancy toward biotech and synthetic biology companies, given the industry’s history of unfulfilled promises that have resulted in significant investor losses. For example, Ginkgo Bioworks, once an industry leader, reached a US $27.3B valuation only to drop to US $650M.

However, eXoZymes clearly stands apart in the industry. Its platform already delivers near-theoretical yields and titres, and can meet the demand for nutraceutical and pharmaceutical compounds without the need for significant infrastructure scale-up. If the company accomplishes even a fraction of its vision, eXoZymes’ platform could usher in a new wave of global biochemical manufacturing, advancing both environmental sustainability and human well-being.

With a current market capitalisation of US $120 M, eXoZymes represents an asymmetric investment opportunity with significant re-rating potential on the horizon.

Resources

To learn more about eXoZymes, you can view my extensive investment report as well as listen to the following Interview with the SynBio industry’s largest podcast and recent company quarterly presentation

I have also established an eXoZymes Investor Discord group, which you can join via the following link.

Invictus Energy Limited (ASX: IVZ, OTCQB: IVCTF) is an Australian-listed independent oil and gas company focused on high-impact exploration and production (E&P) assets in sub-Saharan Africa.

The company’s flagship asset is its 80% operated interest in the multi-Tcf Cabora Bassa basin in northern Zimbabwe, one of Africa’s last remaining frontiers with elephant-scale potential. The position is anchored by the immense Mukuyu structure, with additional high-impact targets across the Central Fairway and Basin Margin trends.

Exploration drilling in 2022 and 2023 delivered the first-ever hydrocarbon discoveries in Zimbabwe, confirming a working petroleum system across multiple stacked reservoirs and validating the basin’s charge, reservoir and seal model. On the back of these results, Invictus is now preparing to spud the Musuma-1 exploration well, a 1.2 Tcf gas and 73 million barrel condensate lead, in the coming months. This will be followed by a broader program including a multi-well exploration and appraisal campaign, extensive 3D seismic acquisition and the planned re-entry and flow testing of Mukuyu-2.

Most significantly, on 27 August 2025, Invictus announced a landmark strategic partnership with Al Mansour Holdings (AMH), a sovereign-backed investment group with direct ties to Qatar’s royal family. The deal sees AMH acquiring a 19.9% stake in Invictus for US$25 million. More importantly, AMH has committed to providing up to US$500 million in conditional development financing, providing a pathway to rapidly transition the Cabora Bassa to commercial production.

The announcement also unveiled the creation of Al Mansour Oil & Gas (AMOG), in which Invictus holds a 10% free-carried stake, while Al Mansour Holdings will provide 100% of the capital funding. AMOG plans to become the largest private Qatari E&P company outside of Qatar, acquiring currently producing and near-term development assets across Africa. Several high-impact transactions are already in advanced discussions, with the first expected to close before year-end. Crucially, Invictus will lead the technical, operational and commercial aspects of AMOG, ensuring the company and its shareholders capture the JVs' multi-billion-dollar portfolio.

Unlocking One of Africa’s Final Energy Frontiers - Cabora Bassa Basin

Spanning an immense 360,000 hectares in northern Zimbabwe near the Mozambican border, the Cabora Bassa basin is regarded as one of Africa’s last unexplored rift frontiers. It is also one of Africa’s largest remaining undrilled onshore basins, with multiple play types offering multi-billion-barrel oil-equivalent exposure to predominantly conventional gas yet complemented by condensate and light oil.

Cabora Bassa shares key geological characteristics with other highly productive East African Rift basins, including Uganda’s Albertine Graben (6.5+ billion barrels recoverable) and Kenya’s South Lokichar Basin (1+ billion barrels discovered). Its proven geological setting is reinforced by more than 1,875km of 2D seismic data, legacy data from Mobil’s 1990s above-ground campaigns and Invictus’ two successful exploration wells.

Since acquiring the asset in 2018, Invictus has confirmed a working petroleum system through its high-impact campaigns. Mukuyu-1 (2022) discovered light oil, condensate and gas and was followed by Mukuyu-2 (2023), which intercepted multiple gas-bearing reservoirs in the Upper and Lower Angwa Formations. In 2024, Wood Mackenzie independently ranked the Mukuyu structure as the second-largest discovery in Sub-Saharan Africa with an estimated 230 million barrels of oil equivalent (1.3 TCF) following the two successful campaigns.

Importantly, Mukuyu represents just one structure within the entire Cabora Bassa basin. Additional prospects have been identified in the Central Fairway and Basin Margin, offering multiple high-impact opportunities. Independent assessments estimate the entire basin’s prospective resources at more than 2.1 billion barrels of oil equivalent, placing it alongside some of the largest onshore frontier basins globally.

With an 80% operating interest alongside local partner One Gas Resources (20%), Invictus Energy is now advancing the early commercialisation of the basin, now backed by Qatar’s sovereign-linked Al Mansour Holdings Group. In parallel, the Zimbabwe Ministry of Finance is granting National Project Status (NPS) to the Cabora Bassa project, recognising its potential to deliver broad economic benefits, attract foreign investment and create local employment.

Historic Basin Opening Success

Mukuyu-1

The Mukuyu-1 exploration well, drilled in late 2022, marked the first-ever basin-opening campaign and was designed to assess the entirely new petroleum province. Targeting stacked objectives across the Post-Dande, Pebbly Arkose and Upper and Lower Angwa formations, the well evaluated an immense structural closure covering more than 200 km² with a vertical relief exceeding 1,500 meters.

Drilled to a total depth of 3,923 meters, Mukuyu-1 delivered clear evidence of a working petroleum system. Wireline logging, mud-gas analysis and fluorescence testing confirmed the presence of light oil, condensate and natural gas across multiple intervals. Elevated gas shows were recorded over a combined 1,000 meters of gross section, with strong background gas up to 135 times above baseline in the Upper Angwa. Hydrocarbon samples recovered indicated moveable light oil and condensate, validating the basin’s charge, reservoir and seal model.

Although the well was ultimately plugged and abandoned without a flow test, Mukuyu-1 achieved its primary objectives as a wildcat well. It proved the existence of a working petroleum system in the Cabora Bassa, confirmed the presence of high-quality reservoirs and de-risked billions of barrels of prospective resources across the licence. The data gathered from the well laid the technical foundation for the Mukuyu-2 appraisal campaign in late 2023.

Mukuyu-2

The Mukuyu-2 exploration well, drilled in late 2023, was a 7 km step-out from Mukuyu-1, to test the southern portion of the Mukuyu structure. It was designed to confirm reservoir quality and hydrocarbon presence in the Upper and Lower Angwa formations, while materially de-risking the overall scale of Mukuyu.

Mukuyu-2 intersected multiple hydrocarbon-bearing zones across both formations, with Wireline logs, mud-gas analysis, fluorescence testing and downhole sampling confirmed the presence of moveable hydrocarbons, including gas-condensate and light oil. In the Upper Angwa, net gas pay exceeded 13 meters across several clean sand reservoirs, supported by four hydrocarbon samples recovered during wireline testing. The Lower Angwa also had significant gas shows, with over-pressured intervals below 3,400 meters and elevated mud-gas levels up to 120+ times above baseline, confirming liquids-rich condensate reservoirs and pressure support.

In total, 15 hydrocarbon samples were recovered across both formations, and preliminary evaluation indicated 35 meters of net pay. While this figure may appear modest, within the context of the structure covering more than 200 km² and being laterally connected between Mukuyu-1 and Mukuyu-2, it signifies Mukuyu as a world-class discovery capable of delivering transformative value for shareholders.

Mukuyu-2 also intersected additional gross sands that were excluded under the strict net-pay cut-off criteria. As CEO Scott Macmillan stated in a 2023 Fireside Chat, the first exploration wells in frontier basins often apply extremely conservative cut-offs, deliberately excluding thinner or lower-quality sands that routinely flow commercially once properly tested.

Most critically, Mukuyu-2 was also unable to drill through the entire Lower Angwa formation due to operational constraints, leaving deeper and highly prospective zones untested. As a result, the current net-pay figure only reflects part of the system and the overall hydrocarbon potential of the structure is almost certainly far greater than what has been reported so far.

Following the conclusion of the exploration campaign, the well was suspended with a 7-inch liner installed, ensuring the integrity of the hole and leaving it ready for re-entry and multi-zone flow testing in the next phase of operations.

2024/2025 Share Price Collapse

Until recently, Invictus Energy’s share price had been weighed down by the sharp collapse that followed the Mukuyu-2 discovery. This was triggered in part by a hostile institutional investor offloading a large block of shares in an attempt to cause panic in the market.

At the same time, the market recognised that Invictus Energy was effectively stalled, lacking the funding required to advance basin operations. With further equity raises set to cause significant dilution, the company began seeking farm-in opportunities with global E&P players. However, any transaction would likely require the finalisation of Zimbabwe’s Petroleum Production Sharing Agreement (PPSA), which defines the fiscal terms and profit split on production. Delays in executing this agreement significantly prolonged the share price stagnation however, the PPSA is expected to be executed within the next fortnight.

Whilst the financing standstill and share price decline were excruciating for investors, last week, Invictus announced a strategic partnership with Qatar’s sovereign-backed Al Mansour Holdings. This deal now delivers the capital support required to rapidly accelerate the early-stage commercialisation of the Cabora Bassa Basin. Just as importantly, it underscores the basin’s global significance, with major Middle Eastern sovereign investors now committing capital and recognising its potential on the world stage.

High-Impact Forward Working Program

The Mukuyu-1 and Mukuyu-2 wells have now materially de-risked the Mukuyu Structure, confirming a working petroleum system with multiple hydrocarbon-bearing reservoirs and high-quality gas-condensate. This also extends to the additional drill-ready prospects in the Central Fairway and Basin Margin plays, where seismic data calibration and direct hydrocarbon indicators (DHIs) have improved chances of success.

Following the Mukuyu-2 campaign in late 2023, the subsequent 18-month period enabled Invictus to extensively review its suite of data, including processing of the CB23 2D seismic survey and integration of Mukuyu well data. This has resulted in optimised basin models through enhanced seismic coverage, depth conversion and Pre-Stack Depth Migration velocities. Additionally, these refinements have enabled a projected 40% reduction in future drilling costs through optimised well design, data acquisition and long-term service contract.

Scott Macmillan, Managing Director of Invictus Energy, recently outlined elements of the company's near-term forward program, now fully enabled by financing from Al Mansour Holdings. Further details will be provided in the next Investor Presentation. With AMH’s backing, Invictus now moves from its extensive dormant period to sustained on-ground activity, prioritising high-impact wells like Musuma-1 and the accelerated commercialisation of the Cabora Bassa basin.

Musuma-1 Campaign

Selected as the next pivotal drilling location, Musuma-1 is supported by compelling DHIs, like up-dip brightening and consistent flat spots. The prospect targets 1.2 Tcf and 73 million barrels of condensate and has a 38% chance of success. Designed as a straightforward, low-cost well with a planned depth of 1,500 meters, Musuma-1 will test a new Dande Formation play on the eastern Basin Margin.

With the recent capital injection from Al Mansour Holdings, pad construction is expected to begin imminently, with spudding to follow in the coming months. The warm-stacked Exalo Rig 202 is undergoing upgrades for redeployment, while major service contracts are out to tender and long-lead items are now arriving at Invcitus’ Harare operations base.

If logs and pressures confirm moveable hydrocarbons during the campaign, Musuma-1 will be suspended with a liner to secure the reservoirs and preserve them for multi-zone flow testing. On re-entry, the liner would be perforated across selected sands, allowing hydrocarbons to be flowed to the surface under controlled conditions. This program will measure stabilised flow rates, pressure build-up and drawdown, while also capturing PVT samples to determine gas composition and condensate yield.

This stage is critical, as flow testing will demonstrate the commercial viability of the basin's reservoirs. Positive results would not only validate the new Dande Formation at Musuma but also materially de-risk the wider Cabora Bassa basin. Just as importantly, a successful flow is expected to unlock the US$500m in conditional financing provided by Al Mansour Holdings.

VOGC, a highly regarded ex-oil and gas professional, has published strong commentary on Musuma-1 via HotCopper.

3D Seismic Acquisition over Mukuyu

Simultaneous to the Musuma-1 campaign, Invictus plans to acquire 3D seismic of the entire Mukuyu structure. Musuma’s distance provides limited noise interference for the vibroseis trucks.

The planned program is designed to optimise Mukuyu appraisal by refining well locations, reducing drilling risk and underpinning an updated prospective resource estimate. While Mukuyu already has extensive 2D coverage, the 3D survey will close gaps and deliver a complete, high-resolution basin model. Calibrated against the Mukuyu-1 and Mukuyu-2 well data and existing basin models, processing is expected to be faster, with results anticipated during 2026.

Mukuyu-2 Deepening and Flow Testing

Following these activities, attention is expected to return to Mukuyu-2. The plan is to re-enter and deepen the wellbore in a 6-inch hole to fully penetrate the Lower Angwa Formation, which remained untested during the initial campaign. This deeper section is considered highly prospective, with elevated gas shows and over-pressured intervals already encountered above.

Re-entry would also enable multi-zone flow testing across both the Upper and Lower Angwa reservoirs. The program will perforate selected intervals, flow hydrocarbons to the surface and record sustained rates, pressure build-up and drawdown, while recovering PVT samples to confirm condensate yields and gas composition.

Successful flow testing at Mukuyu-2 would not only confirm commercial deliverability from the Angwa reservoirs but also elevate Mukuyu as a second cornerstone asset alongside Musuma-1, anchoring the early development strategy for the Cabora Bassa Basin.

Gas Pilot Plant

With successful flow tests at either Musuma-1 and/or Mukuyu-2 establishing commercial deliverability, Invictus intends to fast-track a proof-of-concept pilot production project to monetise the gas-condensate from the Cabora Bassa Basin.

Approved by Zimbabwe’s Environmental Management Agency in February 2025, the pilot adopts a low-cost, modular approach to early commercialisation, centred on gas-to-power generation for nearby industrial offtakers such as mines. The basin’s high-quality gas (low CO2 <2%, no H2S, helium up to 0.63%) is ideally suited for power generation, while condensate by-products provide additional revenue through both domestic and regional export.

The plant will also provide long-term reservoir performance data and test execution processes, all while generating early revenue to help fund further development.

Additional Forward Working Activities

Having secured conditional financing from Al Mansour Holdings, Invictus is now shifting from periodic single-well activities to integrated, multi-well campaigns. The next phase is expected to comprise three to four exploration and appraisal wells, followed by associated flow-testing.

As Scott Macmillian recently outlined, Invictus plans to secure longer-term contracts with service providers, significantly reducing campaign costs. In parallel, refinements to the company’s data suite and well designs are also projected to deliver up to a 40% cost reduction for future drilling costs.

Al Mansour Holdings Strategic Partnership

In a transformative announcement that has propelled Invictus Energy into a new era of growth, the company has secured a landmark strategic partnership with Qatar's Al Mansour Holdings (AMH), backed by His Highness Sheikh Mansour bin Jabor bin Jassim Al Thani, a senior member of the Qatari royal family.

Announced on August 27, 2025, the binding Memorandum of Understanding (MOU) and Share Subscription Agreement deal will inject US$25 million into the company with AMH acquiring a strategic 19.9% equity stake. The placement was priced at A$0.095 per share, representing a premium to the prior day’s close of A$0.052.

This capital injection now provides Invictus with the funding required to accelerate its near-term works program, including the imminent Musuma-1 spud, 3D seismic over Mukuyu and flow testing campaigns, without further diluting existing shareholders. Most critically, AMH has committed up to US$500 million in conditional future financing to advance the project through appraisal and into commercial production, contingent on milestones such as successful flow testing and reserves certification. This transforms Invictus from a capital-constrained junior into a fully funded operator capable of fast-tracking the Cabora Bassa Basin toward development.

Al Mansour Oil & Gas Joint Venture

As part of the landmark deal, Invictus and AMH also announced the creation of Al Mansour Oil & Gas (AMOG), a new joint venture targeting the acquisition of producing and near-term development oil and gas assets across Africa. Invictus holds a 10% free-carried stake in AMOG, managing its technical and operational activities, while AMH will provide 100% of the funding.

Backed by sovereign-linked Qatari capital, AMOG aims to build a diversified pan-African portfolio with ambitions to become the largest private Qatari E&P company outside of Qatar. Several advanced negotiations are already underway on undeveloped and underutilised assets, as well as M&A opportunities, with the first transaction expected before year-end.

AMOG is chaired by His Highness Sheikh Mansour bin Jabor bin Jassim Al Thani, with Invictus nominating two directors to the board. Ryan Singh, formerly IVZ’s Operations Manager, will transition to become AMOG’s CEO.

The decision by Al Mansour Holdings to partner with Invictus is a clear endorsement of the company’s management strength and technical expertise. Invictus’ leadership team brings decades of frontier exploration experience and has been directly involved in multi-billion-barrel discoveries across Africa, including basin-opening campaigns in Uganda, Mozambique and Kenya.

With exposure to a multi-billion dollar portfolio fully funded by its partner, Invictus is positioned to evolve into a full-cycle African E&P player well beyond the Cabora Bassa basin. Over the long term, Invictus’ 10% free-carried interest in AMOG has the potential to drive a material share price re-rating and place the company at the centre of Africa’s energy development.

For a deeper dive into the deal, investors can watch the recent Investor Webinar, where Invictus’ CEO, Scott Macmillian, provided further commentary:

"The AMOG and this new JV, I think that will ultimately dwarf what we are doing in Cabora Bassa. That (referring to CBB) will become a small part of our portfolio given the size and the scale of the assets we are targeting for the AMOG group."

"We are set to transform now rapidly, rather than going through a further appraisal and development period for Cabora Bassa. We are about to transform into a full-cycle E&P company very quickly, and we are uniquely positioned with very incredible backers through Sheikh Mansour and the Al-Mansour group.

" For Qataris to write a cheque for a few hundred million bucks is really not worth their time. This is why we were asked to put together this bigger JV across multiple countries so that it is a meaningful company and asset base. Initially, we were seeking US$200 million to get us to the starting line for us to be able to go for the commercial funding arrangements with traditional banks that we do here, that's not worth their time.”

“Question: Would you say (AMOG's potential transactions) are comparable to the Cabora Bassa basin in scale?
SM: Larger! That's why I said that it (CBB) will become a smaller part of our portfolio.”

Al Mansour’s African Investment Tour

In August 2025, His Highness Sheikh Mansour bin Jabor bin Jassim Al Thani, a senior member of Qatar's ruling Al Thani family and Director of the Government Communications Office, embarked on a high-profile investment tour across sub-Saharan Africa through his private investment vehicle, Al Mansour Holdings.

The Sheikh met with the presidents of Botswana, Zambia, Mozambique, Zimbabwe, Burundi and the Democratic Republic of Congo, signing bilateral agreements pledging over US$102 billion to drive economic development across sectors including energy, mining, agriculture, infrastructure, tourism and housing. These commitments represent one of the largest private investment pushes into the continent.

The significance of Qatar’s involvement cannot be overstated. This is a nation that has transformed itself into one of the world’s largest LNG exporters, building a US$524+ billion sovereign fund from hydrocarbons. Few countries have unlocked such value from oil and gas, and now Qatar’s strategy, capital and global influence are being channelled into AMOG.

For Invictus Energy, the upside is truly extraordinary, yet the market is seemingly undervaluing the significance of this joint venture. If even 20% of AMH’s US$102 billion sub-Saharan pledge were directed into oil and gas transactions (US$20.4 billion), Invictus’ 10% free-carried stake would equate to an implied US$2.2 billion (A$3.3 billion) valuation.

Yet the real value uplift for Invictus will come once these underdeveloped and underutilised assets are fully financed, appraised and transformed into significant cash-generating projects.

Unlocking Cabora Bassa’s Commercial Potential

Southern Africa is in the midst of one of the world's most severe energy crises, plagued by persistent power shortages, unreliable grids, and heavy reliance on aging infrastructure and drought-vulnerable hydro. Zimbabwe alone endures rolling blackouts of up to 18 hours a day, while neighbouring South Africa, Zambia and Mozambique face similar challenges.

In light of this dire energy situation, the Cabora Bassa Basin has been identified as a potential game-changer for regional energy security and economic growth. To this end, Invictus has already signed key pilot-plant MOUs with Tatanga Energy for a 500 MW gas-to-power plant (initial 150 MW phase) and with Himoinsa Southern Africa/Dallaglio Investments for a 12 MW facility at the Eureka Gold Mine.

The basin's proximity to critical infrastructure further strengthens its commercialisation pathway, with the Southern African Power Pool (SAPP) grid located just 100 km from the Mukuyu structure. This access supports the development of a 1,000+ MW gas-to-power plant directly tied into SAPP, enabling a reliable domestic energy supply while providing regional export opportunities.

The economics are highly attractive, with Invictus benchmarking local gas pricing at US$10/GJ, more than double the current US Henry Hub levels (US$3–4/GJ). With an 80% operating interest and expected favourable PPSA terms, Invictus is positioned to capture the lion's share of this multi-billion-dollar asset. Crucially, the pathway to commercialisation is now dramatically accelerated by the US$500 million in conditional financing from Al Mansour Holdings.

Mitigated Sovereign Risk

While operating in Zimbabwe inevitably carries the perception of sovereign risk, Invictus has established a series of strategic alignments that materially de-risk its position and directly tie the success of Cabora Bassa to the national interest. These include:

- Zimbabwe's sovereign wealth fund, the Mutapa Investment Fund, owns approximately 5% of Invictus Energy. This direct ownership ensures the government has clear skin in the game, aligning national interests with shareholder value creation.

- Invictus’ listing on the Victoria Falls Stock Exchange (VFEX) has broadened local ownership by attracting high-net-worth Zimbabwean funds. These influential investors provide an additional layer of safeguard, as any government malpractice would directly threaten domestic capital and trigger strong resistance.

- Invictus’s Board includes Joe Mutizwa, one of Zimbabwe’s most respected business leaders, who also serves on the Presidential Advisory Council (PAC). Reporting directly to the President, PAC shapes policy on investment, economic growth and national development. Mutizwa’s role provides Invictus with a direct line to key decision-makers, enabling the company to navigate reforms and secure pro-investment outcomes.

- Zimbabwe’s Ministry of Finance recently awarded National Project Status (NPS) to the Cabora Bassa project, recognising its strategic national and regional importance for economic growth and development. This designation provides a range of fiscal and non-fiscal incentives, including duty exemptions, fast-tracked permitting and streamlined access to key infrastructure and services as the project moves towards commercialisation.

- Zimbabwe has established a clear legal and fiscal framework through the consolidated PEDPA and PPSA agreements. Together, these streamline approvals, define investor protections and set transparent profit-sharing terms once commercial production begins. Under the PPSA, Zimbabwe stands to generate billions in revenue that it desperately requires. Any government interference would directly jeopardise a critical national funding source.

- Al Mansour Holdings, now a 19.9% shareholder in Invictus Energy, has recently committed US$19 billion of investment into Zimbabwe across multiple sectors. This directly ties Invictus’ success to Al Mansour’s national investment strategy, meaning any adverse government action would put this US$19 billion commitment at risk.

World-Class Management Team

Invictus Energy is led by a world-class management team with decades of combined experience in frontier oil and gas exploration across sub-Saharan Africa. The team has a proven track record of delivering multi-billion-barrel discoveries and successfully navigating complex operations to generate substantial shareholder value.

- Scott Macmillan, Managing Director, is a Reservoir Engineer and founder of Invictus Energy. With more than 15 years of experience across exploration, field development planning, reserves and resources assessment, reservoir simulation, commercial valuations and business development, Macmillan brings both technical depth and leadership. Importantly, he is also a Zimbabwean national, providing strong in-country alignment.

- John Bentley, Non-Executive Chairman, has over 40 years’ experience in international resource development, with a particular focus on Africa's upstream oil and gas sector. He was instrumental in the formation of Energy Africa Ltd, which grew to operate across 12 countries, before being acquired by Tullow Oil for US$500 million in 2004.

- Robin Sutherland, Non-Executive Director, brings over 35 years of experience in African E&P, having held senior technical and leadership roles across the continent. He has been pivotal in numerous multi-billion-barrel discoveries across seven African countries, including leading Tullow’s exploration team through discovery and appraisal in Ghana and Kenya before being appointed the General Manager Exploration Africa in 2015.

- Joe Mutizwa, Deputy Chairman and Non-Executive Director, is one of Zimbabwe’s most respected business leaders. Formerly an executive at Delta Corporation, one of the largest companies on the Zimbabwe Stock Exchange, he now chairs Mangwana Capital, a leading investment firm. Mutizwa also sits on the Presidential Advisory Council (PAC), providing Invictus with a direct line to government decision-making and pro-investment reforms.

- Gabriel Chiappini, Non-Executive Director and Company Secretary, is a seasoned ASX director with more than 17 years of capital markets experience. He is currently the Managing Director of Black Dragon Gold and was formerly a director of Neon Energy.

- Vicky McLellan, Chief Financial Officer, brings over 20 years of experience in the oil and gas sector, with a proven track record in financial management and strategic growth across multinational energy companies. Before joining Invictus, McLellan served as the CFO at FAR Limited and spent nine years with Chevron.

- Barry Meikle, Country Manager, is a Zimbabwean national responsible for overseeing all in-country corporate, financial and operational aspects of Invictus’ activities. He brings extensive experience in managing projects and operations across the energy sector, with expertise in exploration, safety and environment and geophysical surveying.

Resources & Links

• Invictus HotCopper Forum

• Dedicated Invictus Discord Channel

• Company Website

• Company YouTube Account

• Company X Account

• May 2024 Investor Presentation

• Next Investors Invictus Coverage

• Crux Investor Invictus Coverage

• Most recent JRI Fireside Chat (Nov 2023)

• 2022 S&P Global Article

• Cabora Bassa Basin Social, Economic and Environmental Impact Report

JOIN THE EXOZYMES INVESTOR DISCORD CHAT

Company Overview

eXoZymes Inc. (NASDAQ: EXOZ) is a Biotech company engaged in the research and development of its patented biochemical manufacturing platform. Rather than relying on the internal metabolic pathways of organisms, as is the case with cell-based methods, the company has developed a new, groundbreaking method of producing targeted small chemical molecules. This is achieved through harnessing the natural catalytic power of enzymes, engineering them to optimally function in a cell-free environment.

1. EXOZYMES’ DOMINANCE POTENTIAL

eXoZymes has the potential to disrupt global chemical manufacturing methods with its revolutionary platform innovations, offering unparalleled advantages in R&D speed and cost, high production yields and titres, the use of sustainable feedstocks and a range of other benefits detailed in this report. After a decade of development, eXoZymes’ platform is now ready for commercial launch, finally delivering on the long-held promise that this type of technology could be the Holy Grail solution for biochemical manufacturing.

2. EXTENSIVE INDUSTRY APPLICATIONS AND PARTNER INTEREST

The versatility of eXoZymes’ platform covers a broad range of high-value markets, including pharmaceuticals, nutraceuticals, and industrial and specialty chemicals like biofuels. With a total addressable market of over $1.4 trillion, eXoZymes Inc. is already engaged in over 100 strategic partnership discussions, including numerous signed non-disclosure Agreements (NDA). eXoZymes recently announced its first subsidiary and expects to announce its first joint venture partnership later in the year.

3. POWERHOUSE MANAGEMENT TEAM

eXoZymes Inc. is led by a highly experienced and globally renowned team, including industry-leading subject scientists with extensive expertise in enzyme engineering and biosynthesis. The company’s CEO, a seasoned Biotech executive and visionary strategist, has guided multiple startups to industry dominance positions. Additionally, driving the company’s commercial success are two high-calibre business development professionals, the former Chief Business Development Officer of Gevo and the former Director of Business Development at Ginkgo Bioworks.

4. LACK OF INVESTOR AWARENESS AND LIMITED SHARE FLOAT

Having recently listed on the Nasdaq exchange, eXoZymes Inc. has, until now, maintained a low profile. With founders, insiders and institutions holding over 68.24% of the stock, eXoZymes presents a unique opportunity for early investors to gain exposure in a company with immense growth potential. Additionally, the following Slack Capital report is among the first major coverages of eXoZymes Inc.

In addition to this report, Slack Capital has also released a four-part video interview series featuring key members of eXoZymes’ leadership team. eXoZymes’ recent Investor Webinar and Q1 Earnings Call also detail upcoming milestones and strategic priorities.

JOIN THE EXOZYMES INVESTOR DISCORD CHAT

YouTube Interview Series

• Inside eXoZymes with Michael Heltzen, CEO

• Scientific Platform with Tyler Korman, VP of Research

• Commercial Strategy with Damien Perriman, CCO

• Big Tech Assessment with Chris Marlett, CEO of MDB Capital

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Chemical Manufacturing Industry

Chemicals are the foundational building blocks of our world and their manipulation and transformation drive nearly every aspect of modern life. From extracting natural compounds found in plants to synthesising molecules in modern medicines, chemicals are essential to food production, pharmaceuticals, consumer goods, transportation and many other sectors.

The resulting chemical manufacturing industry is a complex global network focused on the research, development and production of these vital substances. In 2017, the chemical manufacturing industry was valued at over $5.7 trillion and was estimated to contribute roughly 7% to the global economy. In 2020, a comprehensive global report identified over 350,000 chemicals and chemical mixtures registered for commercial production, with the United States of America alone contributing over 2,000 new chemicals each year.

For decades, the industry has relied on resource-intensive chemical production methods that, while effective, have caused significant impacts on environmental degradation, resource depletion and global health. A report released in January 2023 estimated that the chemical manufacturing industry emits up to 1.3 gigatonnes of CO₂e annually, accounting for approximately 2.2% of total global greenhouse gas emissions. The established landscape for modern chemical production relies on three main approaches:

1. Petroleum-based Manufacturing

2. Plant-based Manufacturing

3. 1st Generation Cell-based Synthetic Biology

However, as Slack Capital’s report will detail, a new approach is emerging with eXoZymes’ first-of-its-kind cell-free biomanufacturing method.

As the global demand for chemicals continues to grow, the need for more sustainable and efficient chemical manufacturing practices has become paramount. eXoZymes’ innovative platform has the potential to usher in a new wave of chemical manufacturing, unlocking a future of greater environmental sustainability and human well-being.

Petroleum-based Manufacturing

A significant sector of the chemical manufacturing industry focuses on the conversion of crude oil and natural gas into valuable petrochemicals. These non-renewable feedstocks serve as the foundation for many modern products including plastics, synthetic rubber, fertilisers, detergents, solvents, pharmaceuticals and a multitude of other chemicals vital to modern life.

Plant-based Biomanufacturing

Using plant biomass, such as sugars and lipids, plant-based biomanufacturing offers an alternative to traditional petrochemical methods. Using techniques such as fermentation, distillation and solvent extraction, this process manufactures a broad range of products including alcohol, biofuels, pharmaceuticals and other biochemicals.

Synthetic Biology

Synthetic Biology is a collective term for designing and engineering biological systems to create or improve useful products and functions. Synbio aims to biologically solve challenges in medicine, food and agriculture, energy, the environment and beyond. Some of the more recognised applications of Synbio include the cultivation of lab-grown meat from samples of animal tissue as well as Colossal Biosciences’ recent announcement of genetically engineering wolf pups with dire wolf traits, using gene-editing tools.

What has made Synthetic Biology such a promising sector is its power to reshape how we fundamentally engage in daily life. By combining advanced bioengineering tools with modern technological platforms, Synbio has the potential to significantly reduce global impacts on environmental damage, increase resource efficiency to achieve higher yields, reduce raw material supply constraints, develop advanced biomaterials like bio-plastics, as well as deliver personalised medicines that enhance health and extend lives.

The application of Synthetic Biology is so staggering that the Boston Consulting Group estimates that by 2030, Synbio’s application in manufacturing could account for up to $30 trillion to the global economy. Similarly, McKinsey & Company has estimated that up to 60% of the inputs into the world's physical products could, in principle, be produced biologically.

Synbio’s recent expansion has stemmed from the development of modern technology platforms supported by a surge of investment and a collective rally to tackle global challenges.

On the technology front, platforms such as CRISPR-Cas9 gene editing, DNA sequencing and synthesis, AI-driven design, automated biofoundries, synthetic genomics, directed evolution and metabolic engineering have enabled synthetic biology to become meaningfully applied. While investment in the Synthetic Biology sector has recently stagnated, in 2023 Synbio startups raised over $6.9 billion, down from 2021 funding of over $20 billion. This decline in investment is likely attributed to the numerous technical challenges still present which have slowed the progression and adoption of early-stage Synbio platforms.

Synthetic Biology still has a promising future, yet many innovations still remain in the research or pilot stages. Scaling these platforms for industrial applications requires overcoming numerous technical, regulatory and economic hurdles. Companies that showcase tangible evidence of their platform's ability to effectively scale and maintain cost-efficiency will be among the companies that drive Synbio’s revolution forward.

1st Generation Cell-based Chemical Manufacturing

One such sector of Synthetic Biology which has struggled to demonstrate broad success is 1st Generation Cell-based biochemical manufacturing. These technology platforms harness the internal metabolic pathways of cells, where scientists use modern tools to reprogram microorganisms to produce targeted small chemical compounds.

1st Generation Cell-based SynBio typically starts by identifying and isolating the specific genes that encode the enzymes responsible for producing a targeted compound. These genes are then inserted into a microorganism's DNA, reprogramming it to synthesise the chemical. These modified cellular organisms are then grown in a bioreactor, where they are fed nutrients, such as sugar, to promote cellular growth and ultimately produce the targeted chemical.

Although initially hailed as a viable solution for sustainable chemical production, cell-based Synthetic Biology has yet to overcome numerous limitations, ultimately hindering its economic viability and industrial adoption. Bold claims from companies like Ginkgo Bioworks and Zymergen were made however, the inherent complexities of controlling living organisms proved too difficult, leading to inconsistent results and high development costs.

At their peak, cell-based biomanufacturing companies like Ginkgo Bioworks and Codexis saw their market cap expand to $27.3 billion and $2.7 billion. Today, these companies' values have collapsed to $461 million and $218 million respectively, leaving many investors and stakeholders holding substantial losses. This has partially tarnished the optimism towards Synbio’s near-term prospects for sustainable biochemical production.

It is important to note that eXoZymes Inc. is not a Synthetic Biology company. Its platform does not use living cells but instead operates entirely outside the cell through its proprietary, cell-free Exozyme System platform.

Cell-Free Systems

Unlike cell-based platforms which rely on the highly complex systems of a living cell, "cell-free" technologies offer a more controlled approach by utilising purified, non-cellular biological components, such as isolated proteins and nucleic acids.

This distinctive technique has enabled the development of numerous biotechnological tools. For example, the approach is currently used in cell-free DNA/RNA analysis, allowing for non-invasive genetic examination in diagnostics and monitoring activities. Cell-free protein synthesis enables the controlled production of specific proteins for research and therapeutic development. Notably, cell-free biomanufacturing, the space in which eXoZymes Inc. operates, leverages enzymes to biomanufacture small chemical molecules without the need for living organisms.

Although these various applications all fall under the term "cell-free," it is important to note that each method operates with fundamentally distinct objectives, mechanisms, and processes.

eXoZymes’ Revolutionary Platform

eXoZymes Inc. has developed a groundbreaking cell-free manufacturing platform that enables enzymatic biocatalysis to occur outside living cells. This technology ushers in a new paradigm in biochemical manufacturing, distinctly separate from 1st Generation Cell-based Synthetic Biology.

Functioning similar to a chemical reaction in a bioreactor environment, eXoZymes’ platform leverages its engineered enzymes, termed “Exozymes”, in an Exozyme System to convert bio-based feedstocks into targeted small chemical compounds.

A comprehensive study on the science behind the company’s platform can be found in the following publication: The Bio-inspired Cell-Free Approach to Commodity Chemical Production.

Additionally, the GEN Biotechnology journal recently featured a cover story by eXoZymes Inc., where the company introduced the new scientific terms ‘Exozymes’ and ‘Exozyme Systems’.

Enzymes and Exozymes

Enzymes, primarily found inside cells, are specialised proteins that facilitate the breakdown and conversion of chemical substrates. These biocatalysts are considered a cell's biological workhorse, accelerating the chemical transformation process of biocatalysis.

To synthesise intracellular enzymes, a cell transcribes genetic instructions from its DNA into messenger mRNA molecules. Ribosomes, the cell’s tiny protein factories, then use this mRNA to assemble the proteins which become enzymes. Enzymes are naturally adapted for cellular environments, where cells can maintain optimal temperature, pH, cofactor levels and protection from external stressors. Outside a cell’s regulated environment, enzymes can quickly denature and lose their stability and efficiency as biocatalysts.

Exozymes

Exozymes are enzymes that naturally function or are engineered to function outside a cell (cell-free) to produce small chemical molecules. Exozymes’ distinct feature over intracellular enzymes is their ability to maintain biocatalytic performance in the extreme conditions of industrial biomanufacturing applications. This is due in part to their unique traits that may have been engineered for optimal stability, activity, and specificity under conditions that would typically impair intracellular enzymes. Importantly, while all Exozymes are enzymes, not all enzymes possess the necessary traits to be Exozymes.

Common Extracellular Enzymes vs. Optimised Exozymes

While enzymes are conventionally associated with cellular processes, their application beyond the cell is already established in a range of commercial products and industrial applications. For example, optimised protease and lipase enzymes in laundry detergents are used for single biocatalysis processes to break down stains on our clothing.

Biocatalysis and Exozyme Systems

In order for enzymatic biocatalysis to occur, a substrate must bind to an enzyme's active site, which is precisely shaped to fit that feedstock molecule. Once bound, the enzyme stabilises the substrate's transition state and facilitates the rearrangement of electrons to break or form new chemical bonds.

These reactions often require cellular cofactors, such as ATP or NADPH, to provide energy to assist in electron transfer. Following this reaction cycle, the enzyme then releases the intermediary and returns to its original state, ready to catalyse another reaction.

Converting an initial feedstock into a target chemical compound relies on numerous enzymatic pathways, with each module converting one intermediary to the next during biocatalysis.

• Module 1: Feedstock (Substrate A) → Intermediate B

• Module 2: Substrate B → Intermediate C

• Module 3: Substrate C → Intermediate D

• Module X: Substrate X → Targeted Chemical Compound

Exozyme Systems

Exozyme Systems are specifically designed biochemical pathways that utilise Exozymes as well as essential elements to enable efficient industrial production of valuable small molecules outside of a living cell. A key feature of Exozyme Systems is their ability to integrate elements such as cofactors, chemical reagents, and environmental control components to achieve continuous, efficient, and cost-effective cell-free bio manufacturing.

A significant advantage of Exozyme Systems lies in its cost-effectiveness and scalability, which is often a substantial barrier associated with traditional cell-based biomanufacturing platforms. This is largely due to Exozyme Systems ability to bypass the metabolic limitations in a living cell.

The Platform’s Three Phases

eXoZymes has developed three distinctive phases, establishing itself as a dominant R&D leader in the cell-free biomanufacturing sector. These phases, inspired by recent Nobel Prize-winning chemistry awards and proprietary AI-driven technology, create a highly efficient, scalable and cost-effective biomanufacturing platform.

The company recently showcased its R&D effectiveness, developing a new target compound from concept to synthesis in mere weeks, a feat that stands in stark contrast to the years of chemical development typically required for traditional and Synbio platforms.

Phase 1. Exozyme Design & Development Cycle

eXoZymes’ core strength and leadership advantage lies in its rapid and iterative Design, Build, Test and Learn (DBTL) cycle. This unique system generates valuable data and insights, enabling scientists to optimally engineer enzymes into Exozymes for the company’s Exozymes System.

Design: Enzyme Identification and Optimisation

The initial stage of the DBTL cycle begins by analysing the molecular structure of a targeted chemical compound to determine the required Exozyme System elements including the biocatalysis pathways and optimisations for its Exozymes. Using this information, the company then leverages internal and external protein/enzyme databases along with a high-performance Computational Protein Design model to rapidly screen extensive libraries that identify potential enzyme candidates theoretically capable of synthesising the targeted compound.

After identifying initial enzyme candidates, eXoZymes utilises its proprietary AI/Machine Learning model, which has been trained on extensive datasets from previous DBTL cycles. This model analyses the structural and functional characteristics of the enzyme candidates and highlights specific mutations or modifications that could further enhance the enzyme's performance.

By integrating eXoZymes’ AI model into its design ecosystem, it dramatically increases the R&D time efficiency and success rate in selecting the most appropriate enzyme optimisations. To complement its AI-driven approach, eXoZymes also leverages Directed Evolution (2018) principles, iteratively introducing targeted genetic mutations and selecting variants with superior traits.

Build: Creating and Preparing Exozymes

The Build stage then produces these engineered enzymes into ultra-pure and highly bioactive Exozymes. To synthesise the optimised Exozymes, the company selects an appropriate microbial host, such as E. coli, based on its ability to efficiently express the recombinant Exozyme proteins. The company utilises CRISPR-Cas9 gene-editing technology (2020) to precisely edit microbial host genomes and insert the engineered Exozyme genes into these sites. These modified microbes are then cultured in a bioreactor to produce the desired Exozymes.

Following fermentation, the synthesised Exozymes are then purified using chromatography techniques, such as affinity chromatography, ion-exchange chromatography and size-exclusion chromatography. The results of these methods create ultra-pure and highly bioactive Exozymes that are free from impurities.

To rapidly identify optimal reaction conditions, the company uses its pioneering BioClick platform, inspired by Bio-orthogonal Click Chemistry (2022). This technique enables precise group transfer reactions that modify target compounds using the surgical precision of Exozymes. Additionally, immobilisation techniques are used to anchor the Exozyme to solid supports, enabling its reuse across multiple batches and thereby reducing production costs.

As the targeted compound is still in its R&D phase, eXoZymes only produces microgram quantities of Exozymes, enabling the company to conduct research to inform future development efforts.

Test: High-Throughput Experimentation

The Test stage then evaluates the performance of the engineered Exozymes System and its components in bioreactor conditions, identifying the best Exozyme candidates for further optimisations.

eXoZymes leverages its AI model to generate hundreds of proposed experiment parameters, including varying Exozyme concentrations, substrate types, cofactor levels, or reaction conditions. The company then uses High-Throughput Experimentation (HTE) to test all these experiments in parallel, exploring a vast array of Exozyme System possibilities. The use of Automated liquidity-handling robotics is employed to ensure precise experimental setups.

Each experiment is then conducted with key biocatalytic flux metrics such as reaction rates, product yields, titres etc. measured via techniques such as mass spectrometry.

By conducting experiments in parallel, HTE significantly increases the speed and efficiency of eXoZymes’ R&D efforts while dramatically reducing the cost per experiment.

Learn: Data Capture and Iterative Improvement

These extensive experimental datasets are then integrated into eXoZymes’ AI model, which identifies subtle patterns or relationships from the hundreds of experiments.

For example, the AI model may detect a specific enzyme mutation that consistently enhances an Exozymes’ stability or activity. This mutation will then be prioritised in subsequent Design phases.

This wealth of data from the testing phase continually refines and accelerates eXoZymes R&D efforts. With each DBTL cycle, eXoZymes’ AI model improves its accuracy in optimisation recommendations, strengthening its predictive capabilities. This accumulated internal database is a significant strategic asset, enabling eXoZymes to tackle increasingly complex chemical synthesis applications with greater effectiveness.

Phase 2. Scaling Exozyme Production

Building on the lab-scale synthesis achieved in the DBTL cycle, Phase 2 of eXoZymes ’platform focuses on scaling Exozyme production to meet commercial requirements.

The company uses relatively standard bioreactor infrastructure to ferment microbial hosts and synthesise its required Exozymes. Once expressed, the Exozymes are then harvested and purified using specialised cell harvesting, lysis, chromatography and lyophilisation techniques.

While the current infrastructure at eXoZymes’ Monrovia, California facility can meet early market demand requirements, scaling Exozyme production for high-volume applications, such as biofuels, will require extensive bioreactor and purification systems. In the future, eXoZymes plans to leverage partnerships with leading enzyme manufacturers, such as Novozymes, for cost-effective and industrial-scale Exozyme production.

Phase 3. Exozyme System Synthesis Process

To synthesise the targeted chemical compound, Phase 3 begins feeding the selected bio-based feedstock, optimised Exozymes, catalytic amounts of high-energy cofactors, such as ATP and NADPH, as well as other reagents into a bioreactor to initiate the Exozymes Systems biocatalysis cycle. The type of feedstock used will depend on the target chemical and may include glucose from corn or sucrose from sugarcane.

Over time, Exozymes convert the feedstock through precisely engineered modular pathways. During each biocatalysis module, bioreactor conditions such as the temperature and pH levels are optimised to ensure maximum conversion efficiency. Depending on the molecular complexity of the targeted compound, an Exozymes System may require only a few modular steps while more complex compounds like pharmaceuticals, could involve 30+ steps.

Following the completion of the entire biocatalysis cycle, the synthesised compound is then extracted from the bioreactor. As traces of Exozymes, cofactors and other byproducts may be present in the reaction mixture, downstream processing such as filtration and recrystallization may occur. However, as eXoZymes’ platform can achieve near-theoretical yields, the targeted compounds’ concentration and purity levels are extremely high.

To ensure that the biocatalysis cycle continuously operates efficiently over time, the cofactors, such as ATP and NADPH, must be regenerated from their spent forms, ADP and NADP+. To achieve this, eXoZymes has developed separate modular pathways alongside the main reaction cycle to regenerate ADP into ATP and NADP+ into NADPH. Additionally, the platform incorporates proprietary autoregulatory systems, such as a purge valve and molecular rheostat, to balance cofactor levels and enable long-term synthesis operations without needing to shut down the platform.

Notably, the synthesis of the targeted chemical compound in Phase 3 can occur in relatively standard bioreactor infrastructure. Unlike cell-based systems which require specialised equipment to sustain living organisms, the platform's distinction comes from its precisely engineered Exozymes and reagents, enabling complex synthesis and high yields to occur without the need for bespoke and CAPEX-intensive infrastructure hardware.

Global transformation through eXoZymes’ Platform

At the heart of eXoZymes’ mission is to transform the world through accessible, sustainable and innovative biomanufacturing solutions. With its unique capabilities, eXoZymes’ platform can overcome the numerous limitations of traditional chemical production methods, establishing a new benchmark for creating the essential chemicals for modern life.

Platform Development Journey

eXoZymes’ development began in 2008 when Tyler Korman, VP of Research, joined James Bowie's lab at UCLA, a world-renowned centre for synthetic biochemistry research. At the time, the team began researching cell-based biofuel solutions with funding from the US Department of Energy (DOE). While results were encouraging, the inherent complexities of the cell-based process highlighted the significant limitations of this system.

Building on their research, in 2013, Prof. Bowie directed Dr. Korman and team member Dr. Paul Opgenorth, VP of Development, to shift their focus towards cell-free metabolic engineering. In the years that followed, the team investigated, established and enhanced its revolutionary and patented biomanufacturing platform. As detailed later, the team began publishing their findings in leading scientific journals, including Nature Chemical Biology and Nature Communications.

In 2019, MDB Capital identified the emerging platform technology concept at the ARPA-E Energy Innovation Conference. At the time, the concept lacked formal company structure and commercial rollout strategies, yet MDB recognised the immense potential of the platform and supported the establishment of Invizyne Technologies (now eXoZymes Inc.). MDB Capital’s co-founders, Chris Marlett and Anthony DiGiandomenico, provided $5.9 million in funding to license the technology from UCLA and formally register the company.

In November 2024, eXoZymes Inc. listed on the Nasdaq Exchange, raising $15 million. In February 2025, the company underwent rebranding efforts, changing its name from Invizyne Technologies to eXoZymes Inc.

Commercial Rollout

eXoZymes Inc. is primarily engaged in the research and development of its three distinct phases related to its biomanufacturing platform. Whilst the company’s current facilities can synthesise small volumes of its targeted chemical compounds, eXoZymes plans to strategically partner with industry players who will integrate the company’s platform into their existing biomanufacturing infrastructure. This calculated approach ensures that eXoZymes can retain its focus on maximising the transformative potential of its innovative platform solution.

This "Pick & Shovel" approach enables the company to remain capital efficient, generate significant revenue opportunities, and deliver substantial value to its shareholders.

eXoZymes’ platform solution has already attracted significant industry interest, with over 100 active discussions alongside 35 new partner prospects from the SynBioBeta Conference held last week. Typically, companies approach eXoZymes Inc. to overcome one of the following:

1. Inability or difficulty in biomanufacturing chemical compounds through existing methods

2. Desire to develop a novel compound or improve a compound’s current characteristics

3. Reduce production costs, as existing methods are economically unfeasible

Given the widespread interest in the company’s platform, eXoZymes is strategically assessing all commercial avenues, aiming to balance financial and operational interests with shareholder value.

To this front, eXoZymes Inc. has identified the nutraceutical with pharmaceutical potential sector as its initial target market, given the industry's demand for low-volume, high-value compounds. This strategic focus aligns with the company’s current biomanufacturing capabilities, which can synthesise kilogram quantities of chemical compounds. Additionally, with the support of the DOE’s NREL division, eXoZymes has also identified biofuels, such as Isobutanol for Sustainable Aviation Fuel, as an additional initial market focus.

As the company advances its operational capabilities, eXoZymes Inc. plans to commercially expand its platform into the food, flavours and fragrances markets as well as the larger-volume, lower-value markets, such as industrial and specialty chemicals. Despite the platform's inherent scalability, these markets require metric ton quantities of chemical compounds, extending beyond the company’s initial rollout focus.

Although the fundamental science behind eXoZymes' platform is currently mature from a development standpoint, the company anticipates significant growth to occur once partnership agreements begin. This ensures that the company can scale its operations alongside its deal growth, including the expansion of its current 31-person team.

Initially targeting the nutraceutical with pharmaceutical markets, eXoZymes’ platform must adhere to the FDA’s Good Manufacturing Practices (GMP) for safety, efficacy and quality standards. Additionally, as eXoZymes Inc. plans pharmaceutical partnerships, its developed compounds will be subject to the often lengthy FDA approval process. This is a major reason why eXoZymes is strategically targeting this industry early to seize revenue opportunities sooner.

Strategic Partnership Selection

Collaborating with appropriate partners is critical for commercialising eXoZymes’ developed compounds. The following qualities may be evaluated when assessing a partner's compatibility and strategic alignment:

Spin-Outs

Spin-out deals occur when XoZymes identifies a chemical compound with significant interest and high-value market potential. The company then initiates R&D efforts to the related chemical compound, as previously outlined in Phase 1, to demonstrate the scientific viability and lab-scale production abilities of its developed Exozyme System.

After validating the system through laboratory testing, eXoZymes forms a fully owned subsidiary, separate from the parent company. The developed compound asset and its proprietary rights are then transferred to this subsidiary, with eXoZymes continuing to provide the necessary funding, platform access, and technical support.

As the compound achieves further development milestones, for example synthesising ten kilograms worth in eXoZymes’ lab, the underlying asset and therefore the subsidiary's economic value increases. Once eXoZymes Inc. has determined that the asset has reached close to its maximum commercial value within the parent company, the subsidiary is spun out through a partial sale of ownership to an external partner. This partner will contribute additional expertise, further increasing the economic value of the commercial asset.

The percentage of equity sold in the subsidiary is largely dependent on the significance of the market opportunity and the development stage of the compound asset.

As will be further discussed, eXoZymes recently launched its first fully-owned subsidiary, NCTx, marking the company’s transition to commercialising its technology platform.

Beyond NCTx, eXoZymes is actively developing its portfolio of compound assets, increasing their underlying economic value before transferring them to subsidiary companies.

Joint Ventures

eXoZymes also plans to pursue joint venture (JV) partnerships to commercialise its asset compounds. Unlike spin-out deals, which involve partnership collaboration once an asset nears its maximum value through the company's R&D efforts, JV deals bring in a partner much earlier in the asset development process.

Joint venture partnerships combine eXoZymes’ R&D strength with a partner’s complementary expertise, as previously detailed. Depending on the market opportunity, involving a partner early can accelerate the likelihood of an asset's commercial success, spread the risk of development, and dramatically increase the asset’s economic value.

To initiate a JV partnership, a separate entity is formed with cost-sharing and profit-split structures based on equity ownership. eXoZymes will continue to actively develop the asset, further optimising the compound's performance, reinforcing its market competitiveness and significantly improving its chances of commercial success.

In a recent Investor Webinar, the company detailed that it expects to announce its first joint venture partnership later this year, with indications that the partner could be a leader in the global nutraceutical/pharmaceutical sector.

Licensing Agreements

In the future, once eXoZymes' innovative platform becomes a recognised leader in the global chemical biomanufacturing sector, the company will begin initiating licensing deal agreements as part of its broader commercialisation strategy.

Licensing agreements grant external partners the rights to incorporate eXoZymes’ platform solution into their existing biomanufacturing processes. In return, eXoZymes may receive upfront payments or royalty compensation based upon the assets sales or use. Licensing agreements offer a low-risk, scalable way for eXoZymes to expand its platform's reach and revenue generation.

The deals for the developed assets can be exclusive or non-exclusive, depending on the market opportunity and volume demand. The licensee assumes responsibility for manufacturing, distribution and customer engagement, while eXoZymes continues to support its partners with technical assistance.

NCTx - eXoZymes’ First Subsidiary

Recently, eXoZymes Inc. established its first subsidiary, NCTx, LLC, focused on developing and producing N-trans-caffeoyltyramine (NCT). This bioactive compound has attracted increasing attention due to its diverse nutraceutical and pharmaceutical applications.

eXoZymes’ innovative platform enabled the rapid development of its NCT compound, moving from concept to targeted demonstration in just 6 weeks. This accelerated development timeline highlights the platform's highly efficient R&D efforts compared to the years-long chemical development timelines typical in the biotech and synthetic biology sectors.

N-trans-caffeoyltyramine

NCT is a naturally occurring compound present in a range of plant sources, including the husk of the hemp seeds, Lycium chinense (goji berry), and Tribulus terrestris.

Despite hemp seed husks having the highest concentration of NCT, a 2019 study found that NCT’s highest concentration level was just 83.2mg per 100g or 0.0832%. Considering that the husks represent a small percentage of a hemp plant's total biomass, NCT’s overall concentration within a plant is substantially low. Due to this reason, it makes extracting and purifying sufficient quantities of NCT extremely challenging and expensive.

Commercial Applications

NAFLD/MASLD and MASH Treatment

Research has provided compelling evidence of NCT's potential in treating Non-Alcoholic Fatty Liver Disease (NAFLD), now often called MASLD, and its more severe form, Metabolic Dysfunction-Associated Steatohepatitis (MASH). These conditions involve excessive fat buildup in the liver, with MASLD representing the most common chronic liver disease worldwide, impacting over 30% of the global population and over 100 million people in the US. Given the association with cirrhosis, liver failure, liver cancer, and increased risk of liver transplantation or premature mortality, effective treatments are urgently needed.

Through studies conducted on mice, NCT demonstrated activity on the HNF4α protein, promoting lipophagy (a fat-breakdown process) and enhancing mitochondrial function for more efficient fat burning. Over the 10-week study, mice fed on a high-fat diet supplemented with NCT weighed 10g less than those on a high-fat diet alone, representing a 35-40% difference in body weight. Additionally, a separate study validated NCT's effectiveness in reversing liver fat accumulation through lipophagy and in decreasing a blood marker typically associated with liver damage.

Notably, current MASLD treatment relies primarily on lifestyle interventions such as diet and exercise. There are currently no specific drug treatments approved for the MASLD condition. However, type 2 diabetes medication and Vitamin E can offer indirect liver health benefits.

Recently, the FDA approved Rezdiffra™, the first therapy specifically for treating MASH however, the related drug market is expected to expand with several other late-stage drugs in development.

With rising global obesity and diabetes rates, the global MASLD treatment market was estimated to be $23.40 billion in 2025 and is forecasted to reach $36.94 billion by 2030. NCTS’ use in obesity and weight management also represents another promising area of research, with the treatment market expected to reach $100 billion by 2030.

Gut Health & IBD Support

There is also evidence that NCT may have significant benefits on gut health and Irritable Bowel Disease (IBD). IBD is a chronic inflammatory condition of the gastrointestinal tract, causing symptoms such as abdominal pain, diarrhea, and rectal bleeding. IBD can increase the risk of strictures and colorectal cancer. Globally, over 4.5 million individuals suffer from IBD.

In a preclinical study on mice fed a high-fat diet with NCT supplementation, the results showcased that the compound upregulated a variety of genes related to gut inflammation. NCT was also demonstrated to support the function of Paneth cells, which are essential for maintaining the intestinal barrier and secreting antimicrobial peptides. A 3-week human study is currently exploring NCT's impact on intestinal barrier function.

Current treatments for gut impermeability and IBD conditions include anti-inflammatory drugs and immunosuppressants, as well as nutraceuticals like probiotics and curcumin. Brightseed Bio Gut Fiber™ is currently the only product on the market containing the NCT compound, yet in small quantities.

The broader gut health treatment market was valued at $51.7 billion in 2023 and is projected to reach $106.4 billion by 2032. Similarly, IBD treatment is expected to rise from $22.9 billion in 2024 to $33.9 billion by 2033.

Commercial Partners

To commercially distribute its NCT compound, eXoZymes Inc. will partner with external parties who have the necessary expertise to ensure rapid market access and successful asset sales.

eXoZymes will initially target the nutraceuticals sector, hoping to have its NCT product achieve Generally Recognised As Safe (GRAS) ingredient status with the FDA. This process can take up to 180 days for the FDA to issue a response to a notification.

Additionally, as eXoZymes’ platform allows for engineering adjustments to optimise its Exozymes, the company can synthesise NCT analogues with significantly enhanced compound traits, offering a more effective form of treatment. However, these compound analogues will require extensive clinical trials and FDA approval for disease treatment and prevention applications.

Initial Market Applications

Nutraceutical Ingredients

TAM: $105 billion

As health and wellness increasingly drive global lifestyle choices, nutraceutical compounds provide a targeted blend of nutrition and health benefits. This thriving sector produces concentrated forms of dietary supplements, functional foods and beverages packed with bioactive ingredients like vitamins, minerals, antioxidants and herbal extracts.

Unlike the pharmaceutical industry, which requires rigorous clinical trials and approvals, the production of nutraceutical compounds operates under lighter regulations, enabling faster market entry. Generally Recognised As Safe (GRAS) standards, set by the US FDA, require accurate nutraceutical labelling, safety testing and quality control to ensure high compound purity.

The nutraceuticals industry relies on the production of high-quality, low-volume compounds often extracted or synthesised from various plant-based feedstocks. A single compound is frequently used across multiple products, providing attractive commercial deal opportunities.

Nutraceuticals’ existing production methods face numerous challenges including low compound yields from plant-based extraction methods, high feedstock costs and continuous supply constraints due to climate change, resulting in infrequent batch production. Additionally, nutraceutical compounds often have low stability and reduced shelf life.

eXoZymes’ platform can offer advantages through delivering high compound production yields and titres, which ultimately boost profit margins. The platform can also use widely available biomass feedstocks, reducing reliance on expensive and rare feedstocks, like ginseng root. The company can enhance the performance of compounds, increasing bioavailability and absorption, while also synthesising new-to-nature compounds. The platform also provides on-demand chemical synthesis, producing compounds year-round beyond plant harvest seasons.

Scientific Report - Terpene

In 2017, Korman, Openorth and Bowie released a scientific report demonstrating the platform's ability to produce the terpene compounds of Limonene, Pinene and Sabinene from 27 Exozymes and inexpensive glucose feedstock over 5 days.

Terpenes are naturally occurring compounds providing characteristic aroma scents, such as Limonene (citrusy, lemon-orange scent), Pinene (pine-like scent) and Sabinene (spicy, woody-citrus scent). These molecules are used across a diverse range of industries, including food flavours and fragrances, commodity chemicals, pharmaceuticals and biofuels.

The study demonstrated eXoZymes platform’s performance, achieving results of:

• Limonene: 88% yield and a titre of 12.5g/l

• Pinene: 104% yield and a titre of 14.9g/l

• Sabinene: 95% yield and a titre of 15.9g/l

The Exozyme System operated continuously over five days, requiring no additional Exozymes, cofactors or reagents, proving the platform's operational efficiency and cost-effectiveness. The published results were an order of magnitude greater than cell-based terpene production, which faces challenges from cellular toxicity and substrate competition.

The 2017 report indicated that with further optimisations to the Exozymes Systems and selected Exozymes, the platform's performance could be further increased and expanding the possibility to synthesise additional terpene compounds such as Sesquiterpenes and Diterpenes.

Pharmaceutical/Active Pharmaceutical Ingredients

API TAM: $255 Billion

The pharmaceutical industry is a critical element to the global healthcare system, focusing on the research, development and distribution of medicines that enhance and support human health. Central to this industry is the production of Active Pharmaceutical Ingredients (APIs), which are the bioactive compounds in pharmaceuticals that provide the intended therapeutic effects.

The API industry typically produces small quantities of ultra-pure chemical compounds, which are later formulated into targeted final products such as pills or tablets. API companies must follow strict regulations set by agencies such as the FDA or Europe’s EMA to ensure safety, quality and effectiveness. The regulatory process for an API often takes years of R&D and clinical trials, with approval never guaranteed.

The API industry currently faces significant challenges including difficulty in scaling chemical production from a lab to commercial quantities. Developing new APIs can be lengthy and expensive. A compound must adhere to strict regulatory requirements which can be difficult when trying to maintain consistent batch-to-batch compound purity. Additionally, with roughly 70% of APIs derived from petrochemical feedstocks, the industry contributes 25% of pharmaceutical companies’ emissions, or close to 1% of global carbon emissions.

eXoZymes’ platform can currently achieve over a 95% compound purity, with the company having plans towards achieving 99.5%, reducing downstream purification requirements and potential drug side effects. The platform’s inherent design ensures that API manufacturers can transition their drug discovery findings from the lab into full commercial production effortlessly. The system's modular production capabilities allow API manufacturers to respond to fluctuating orders without overproducing or tying up extensive capital in inventory. Additionally, eXoZymes’ rapid chemical development timelines allow for faster regulatory filings, potentially delivering new drugs and life-saving therapies to patients sooner.

Scientific Report - Cannabinoid

Korman, Bowie and the team previously published two scientific reports demonstrating the platform's ability to synthesise a range of cannabinoid compounds.

1. A cell-free platform for the prenylation of natural products and application to cannabinoid production (2019)

2. A bio-inspired cell-free system for cannabinoid production from inexpensive inputs (2020)

Following on from its first study, in 2020 the team made further improvements to its Exozymes System, resulting in effective titres of 27.5 g/L of Cannabigerolic Acid (CBGA), nearly seven times higher than yeast-based cannabinoid synthesis methods (3-4 g/L). The platform used just 12 Exozymes and low-cost feedstocks and was also able to synthesise Cannabigerovarinic Acid (CBGVA).

Both CBGA and CBGVA serve as precursor compounds for producing Tetrahydrocannabinol (THC), Cannabidiol (CBD), Cannabichromene (CBC), Tetrahydrocannabivarin (THCV) as well as the hundred additional rare phytocannabinoids with diverse biological properties.

Uniquely, eXoZymes Inc. can synthesise entirely new-to-nature cannabinoids by making engineered optimisations to its Exozymes. These novel variant compounds could feature distinct molecular structures and ring configurations, potentially unlocking new medicinal benefits for cannabinoid-based therapies.

eXoZymes previously reported that its platform could produce a kilogram of cannabinoids for under $10,000, with a roadmap to reduce production costs to under $1,000. By contrast, current market prices for difficult-to-extract cannabinoids typically range from $ 25,000 to $50,000 per kilogram.

THC Bulk Manufacturer License

Since 2022, eXoZymes Inc. has held a bulk manufacturer license for the Schedule 1 controlled substance Tetrahydrocannabinol (THC), allowing the company to produce and sell THC in large quantities after meeting stringent legal and regulatory requirements. The global cannabinoid market is currently valued at $47 billion and is estimated to grow to $101 billion by 2029.

Energy Transition/BioFuels

TAM: $167 Billion

Biofuels are low-carbon liquid fuels and blending compounds derived from organic materials, including plant biomass, agricultural waste and algae. One of the most commonly used biofuels is ethanol, which is derived from plant starches and sugars and is blended in E10 (10% ethanol, 90% gasoline) vehicle fuel. Biofuels have lower carbon emissions throughout their cultivation, processing and combustion lifecycle when compared to fossil fuels, as well as generally producing fewer sulphur oxide pollutants when used.

Isobutanol

An emerging biofuel which is garnering significant interest is Isobutanol, an isomer of n-butanol, which is produced from similar feedstocks as ethanol. Isobutanol has an energy density of 33 MJ/L, similar to gasoline's 34 MJ/L and significantly higher than ethanol's 23 MJ/L. Additionally, this advanced biofuel is less corrosive than ethanol and can be readily used in existing combustion engines and piping distribution infrastructure.

Isobutanol is currently used in Bu16 (16% butanol, 84% gasoline) fuels and qualifies as a renewable fuel, which is defined as having a 20% lifecycle greenhouse gas reduction.

An emerging application of Isobutanol is its use in Sustainable Aviation Fuel (SAF). Currently, the aviation industry contributes 2% to global carbon dioxide emissions and the International Air Transport Association (IATA) has set ambitious targets to achieve zero carbon emissions by 2050. Central to IATA’s goal is the use of SAF, which is a low-carbon aviation fuel alternative made from sustainable feedstocks and production methods.

Alongside the IATA’s target, Europe has mandated that all European-based aviation companies are required to use up to 70% SAF in their jet fuel by 2050, a significant target given that only 0.2% of SAF is currently used. Similarly, in the US, there is growing support to increase SAF usage, with both state and federal governments offering numerous grant opportunities.

Yet, current Isobutanol production methods face several challenges, including difficulties in achieving high yields and titres when biomanufacturing the chemical compound at industrial scale levels. Higher production costs compared to fossil fuels also limit Isobutanol’s economic competitiveness and thereby market adoption. Additionally, cell-based platforms face significant cellular toxicity issues associated with microbial fermentation.

Scientific Report - Isobutanol

In 2020, Korman, Bowie and the team released a scientific report demonstrating that the company’s platform could synthesise Isobutanol from glucose via a 16-enzymatic pathway. The study achieved a productivity of 4 g/L per hour, a titre of 275 g/L and with the Exozyme System yielded 95% over 5 days. These results expanded upon the results from their 2017 study.

At the time, the gold standard for sugar to ethanol production was a productivity of 2g/L, a titre of 100g/L and a yield of 90%. The best reported metrics for microbial Isobutanol production were a productivity of 0.7 g/L, a titre of 22 g/L and a yield of 86% from E. coli. The results achieved by eXoZymes highlighted the company's considerable advantage in synthesising Isobutanol over other best-in-class biomanufacturing methods.

The company is currently collaborating with the DOE’s National Renewable Energy Laboratory (NREL) division to expedite the commercialisation of its Isobutanol Exozyme System. Recently, eXoZymes also received a $2 million grant from the DOD’s BioMADE initiative, which further supports the continued development of its Isobutanol system.

Considerations Scientific Reports

It is worth noting that the presented scientific reports were released several years ago. Since then, eXoZymes Inc. has further improved the performance of its Exozymes System with the support of:

• Enhanced database screening of enzyme candidates to be engineered into Exozymes.

• AI/Machine learning integration leading to further optimised Exozymes characteristics and biocatalysis performance.

• Integration of recent Nobel Prize in Chemistry Award tools further optimising the platform's performance.

Future Market Applications

Food Flavours, Fragrances and Cosmetics

TAM: $71 billion

• Food Flavors Industry: Compounds which enhance culinary sensations such as esters, aldehydes, ketones, terpenes and lactones that mimic natural tastes like fruit, spices, meat, or preservatives. The global food flavours market is valued at $19 billion.

• Fragrances Industry: Mixtures of aromatic chemicals, essential oils and fixatives that craft vibrant sensory profiles such as citrus scents, floral essences and spice layers. The global fragrances market is valued at $62 billion and the industry supplying these compounds is valued at $17 billion.

• Cosmetics: Beauty and care compounds such as emollients, emulsifiers, surfactants, preservatives, pigments and bioactive ingredients.. Applications can include anti-ageing serums, moisturisers, foundations, lipsticks and hair treatments. The global cosmetics market is valued at $296 billion, with the industry supplying these compounds valued at $35 billion.

Industrial & Specialty Chemicals

TAM: Likely reaching trillions of dollars

• Industrial chemicals: These compounds comprise a wide range of foundational chemicals which are used in large-scale manufacturing and industrial processes, such as acids, solvents and petrochemical derivatives. These chemicals often serve as the raw materials or intermediates for producing plastics, fertilisers, detergents, paints and fuels. The industrial chemicals industry produces significant quantities of chemicals, often reaching millions of tonnes per year.

• Specialty chemicals: These chemical compounds are produced in smaller quantities and tailored for specific, performance-driven applications. These compounds can include adhesives, catalysts, coatings, construction chemicals, electronic chemicals, industrial cleaning agents and water treatment chemicals.

eXoZymes’ Market Leadership

As the first and only company currently operating in the Exozyme-based biomanufacturing space, eXoZymes Inc. has strategically established a robust intellectual property portfolio following decades of platform research and development. Leveraging its first-mover advantage, the company has secured numerous patents related to the core innovations in cell-free enzyme stability, cofactor management and metabolic efficiency.

The company also safeguards numerous trade secrets, of which only Korman, Opgenorth and Bowie, the company’s co-founding scientists, know the details of. This level of discretion makes reverse-engineering the company’s platform extremely difficult, requiring years of research and extensive funding to achieve.

eXoZymes plans to further strengthen its market leadership position through securing additional patents via the support of MDB Capital’s highly regarded PatentVest team. These may include:

• The development of entirely new compounds not found in nature or achievable via current biomanufacturing methods. As these small chemical compounds are verifiably novel, the company could seek patent protection.

• The company’s Exozymes which have been genetically engineered for optimal biocatalysis performance. These altered proteins become unique innovations that may be eligible for patent protection.

• The uniquely developed modular pathways for chemical synthesis. As these pathways are not found in nature, and therefore verifiably unique, the company could seek patent protection.

• Further developments in the company’s Exozyme Systems and biomanufacturing platform. These continual advancements could present an opportunity for patent protection.

Competing Technology Platforms

As previously detailed, eXoZymes Inc. is currently the only company focused on Exozyme-based biomanufacturing methods. However, the biomanufacturing sector is dynamic, with new entrants and advancing technologies constantly emerging. Additionally, there are numerous established companies, while not directly replicating eXoZymes’ approach, compete in the same markets however, they use Synthetic Biology approaches. These include, but are not limited to:

• Ginkgo Bioworks: Engineers microbes for a wide range of Synbio applications.

• Codexis: Optimises enzymes for similar industrial applications through directed evolution.

• Amyris: Produces bio-based ingredients using fermentation and engineered microorganisms.

• Cascade Bio: Enhances enzyme performance with cell-free biocatalysts (Not Exozymes)

• Arzeda: Designs novel proteins and enzymes via Computational and AI models.

• Gevo: Focuses on sustainable biofuels through whole-cell biocatalysis processes.

Collaborative Alliances

MDB Capital’s Deep Tech Vetting Process

eXoZymes Inc. has been further validated through MDB Capital’s rigorous Big Tech assessment completed in 2019. This comprehensive due diligence process included, but was not limited to:

Intellectual Property

• Evaluated eXoZymes’ patents and UCLA-licensed agreements, analysing the related market landscape to identify competitors, trends and infringement risks. MDB also explored avenues to reinforce existing patents as well as develop further patent opportunities.

• Gauged the IP portfolio’s economic potential, focusing on market opportunity, patent life, and claim robustness to ensure a defensible leadership position.

Technology Leadership

• Validated the technical feasibility of eXoZymes’ platform, consulting field experts and scrutinising the data. MDB’s iterative questioning ensured claims were held under scrutiny.

• Analysed competitors to confirm eXoZymes’ differentiation, establishing a competitive moat and potential to lead high-value market applications such as pharmaceuticals and biofuels.

Business Model

• Assessed eXoZymes’ go-to-market strategy, defining customer segments, refining sales and marketing approaches and identifying partnerships to support market entry and expansion.

• Recruited commercial management team members, selecting professionals with extensive experience, specialised expertise and a proven track record of success.

• Evaluated regulatory challenges, including grant funding dynamics and potential FDA pathways.

Financial Analysis

• Analysed eXoZymes’ addressable markets in the context of scalability and commercial readiness, aligning market sizing with near-term and long-term monetisation strategies.

• Stress-tested financial forecasts, focusing on revenue drivers, margin structure and capital efficiency across different growth scenarios.

• Determined capital requirements tied to strategic inflection points, supporting funding strategy development and investor positioning.

Following this vetting process, MDB included eXoZymes into the company’s unique incubator program. With over 27 years of experience, MDB has launched 17 IPOs, with notable successes like Medivation being acquired by Pfizer for $14 billion.

GCxN Program

In October 2023, eXoZymes Inc. was accepted into Shell’s highly regarded GameChanger Accelerator Program, which is supported by the US Department of Energy’s NREL division.

Renowned for its rigorous selection process, the GCxN Program grants eXoZymes Inc. access to NREL’s world-class resources, including $250,000 in non-dilutive funding, expert business mentorship and opportunities for real-world large-scale pilot plant testing. Acceptance into the program further validates the significance of eXoZymes’ Isobutanol project but also underscores the impact that this platform can have on the global energy sector.

Exozyme’s strategic collaboration with NREL focuses on fast-tracking the commercialisation of its Isobutanol Exozyme System and centres on the delivery of several initiatives including:

• A comprehensive techno-economic analysis to validate the company’s Exozyme production and biocatalysis models (Example Report).

• A life cycle assessment to quantify the system's Isobutanol carbon reduction benefits (Example Report).

• Identify a range of efficient and cost-effective biomanufacturing methods necessary for the company’s Isobutanol Exozyme System.

NREL’s reports will provide further credibility and validation for prospective joint venture partners towards the company’s Isobutanol project. These reports are expected to be released sometime in 2025.

Management Team

• Michael Heltzen, CEO: A seasoned Biotech entrepreneur with over 20 years of experience. Heltzen has a proven track record of leading startups and established companies. He has held key leadership positions at EXO Incubator, BlueSEQ Innovations Inc., Cardea Bio and BGI Europe, which have provided Heltzen with a deep understanding of the biomanufacturing, synthetic biology and healthcare industries.

• Tyler Korman, PhD., Co-Founder, VP of Research: A leading expert in molecular biology and biochemistry. Korman's technical understanding of cell-free enzyme-based systems stems from his doctoral and postdoctoral studies at UC Irvine and UCLA. Korman’s research, alongside Bowie and Opgenorth, led to the development of eXoZymes’ platform.

• Paul Opgenorth, PhD., Co-Founder, VP of Development: Opgenorth is a leading specialist in metabolic engineering and bioprocess development with specific expertise in cell-free enzyme-based systems. His research has focused on developing efficient and cost-effective methods for synthetically producing biochemicals. Opgenorth was instrumental in developing eXoZymes’ platform alongside Korman and Bowie.

• Damien Perriman, Chief Commercial Officer: Perriman is a Biotech industry veteran with more than 25 years of experience in developing and commercialising biotechnology platforms. Having held senior roles at Genomatica and Gevo, Perriman has successfully launched bio-based products like nutrition, cosmetics, textiles and performance fuels. Perriman’s extensive network and strategic business development experience support eXoZymes in securing high-value deals that strengthen the company’s path to commercial success.

• Zachary Karl, PhD., VP of Business Development: Karl is a highly accomplished business development executive with extensive experience in the life sciences sector. As the former Director of Business Development at Ginkgo Bioworks, Karl reached out to join eXoZymes Inc. after recognising the significance of eXoZymes’ potential. Karl brings invaluable experience in strategic partnerships and a wealth of network connections to expedite the company’s commercial plans.

• James Bowie, PhD., Co-Founder, Board Member: A globally renowned figure in molecular biology and Biotechnology, Bowie's pioneering work in synthetic biochemistry has fundamentally changed how scientists approach biomanufacturing. Bowie's lab at UCLA led to the development of eXoZymes’ platform. Bowie continues to provide valuable guidance to eXoZymes, ensuring the company remains at the forefront of cell-free Exozyme-based biomanufacturing methods.

• James Lalonde, PhD., Board Member: Lalonde is a highly influential figure in the synthetic biology field, with a 40+ year career in drug development and enzyme engineering. Lalonde has held a leadership position at Amgen, where he oversaw R&D and the launch of numerous pharmaceuticals. After reviewing eXoZymes’ research, Lalonde was so impressed that he contacted the team to express his desire to support the company's groundbreaking work.

Financial Snapshot

eXoZymes Inc. is starting its transition from startup to early commercial deployment. During 2024, the company had no operating income and a total net loss of $5.86 million. For Q1 2025, the company had a net loss of $1.85 million. As of the 31st of March, 2025, the company had a cash balance of $8.51 million.

With the recent launch of its first subsidiary and its first joint venture partnership expected later in the year, eXoZymes is beginning its exciting platform deployment period, expecting to attract significant capital and generate revenues in 2025.

Notably, eXoZymes has operated with extreme capital efficiency during its pre-IPO development period. Net losses included $2.0 million (2023), $1.4 million (2022) and $1.21 million (2021).

Since its initial development journey from UCLA, eXoZymes has received $16 million in federal grants and $5.9 million in private investment from MDB Capitals co-founders. eXoZymes plans to strategically target additional government grants with the support of the US DOE’s NREL division.

On the 13th of November 2024, eXoZymes Inc. (formerly Invizyne Technologies) successfully listed on the Nasdaq exchange. The company raised $15 million at $8 per share.

Capital Structure

*Institutional Holding

* Shares Outstanding: 8,367,810

* Stock Options, RSU’s, Warrants etc: 2,523,982

Risk Considerations

Resources

• JOIN THE EXOZYMES INVESTOR DISCORD CHAT

• Company Website

• Company LinkedIn Account*

• Company X Account

• Grow Everything Podcast Episode

• April 2025 Investor Webinar

• May 2025 Investor Webinar

• YouTube Educational Playlist

• Investor Presentation - September 2024

• IPO Prospectus -November 2024

• Company Patents

• Associated Scientific Journal Reports

• Stocktwits Forum

* eXoZymes has only recently begun to build its marketing presence, where previously most of the company's engagements were through its LinkedIn profile.

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Disclaimer: Slack Capital is currently a shareholder of eXoZymes Inc. and therefore has a vested interest in its success. Slack Capital was not compensated in any form by the company to create this Company Report.

Slack Capital’s opinions are not investment recommendations and should not be relied upon for decisions. Information may be incomplete or subject to change. Investors should conduct their research and consult a qualified adviser.

Investments carry risks, and past performance does not guarantee future results. Slack Capital is not liable for financial losses based on this material. This content is not an offer or solicitation to buy or sell securities. Readers should verify information independently before acting.

To access this investment report as a PDF, please click the following link.

Please review Slack Capital’s Investment Disclaimer prior to reading this report.

Investment Overview

Northstar Clean Technologies (TSXV: ROOF) (OTCQB: ROOOF) is a Canadian-listed company focused on the recovery and reprocessing of asphalt shingles, a significant contributor of construction waste in North American landfills. The company has developed a patented process that recovers valuable materials from discarded asphalt shingles — liquid asphalt, aggregate, and fibre ​​— that are then sold to industries that incorporate them into their manufacturing processes.

Collaborative support for the growing waste challenge

According to the U.S. Environmental Protection Agency, more than 16.5 million tons of shingles are discarded annually, making it one of the top five largest materials of construction waste in North America. Amid a global push to reduce waste and promote a circular economy, both the asphalt manufacturing industry and governments are uniting to find solutions that are not only sustainable but also economically viable.

Transforming pilot success to commercial impact

Northstar has successfully demonstrated its technology at its pilot plant in Vancouver, BC, where it refined operational processes to increase the likelihood of success at its next facility in Calgary. If the technology successfully transitions from pilot plant to commercial scale, Northstar intends to ‘copy and paste’ its facility design across multiple strategic locations, unlocking significant revenue potential and further solidifying its first-mover advantage in the market.

Driven by strong economic foundations

Northstar's facilities are built on strong economic foundations that are inherently conservative. With several potential growth factors deliberately excluded but highly likely to materialise, there is a significant opportunity to further enhance the financial performance of its operations. Additionally, the growing focus on ESG and increasing demand for recycling solutions will only seek to boost the economic outlook.

As Northstar Clean Technologies commissions its first commercial facility in Calgary, expected to be fully operational by June 2025, the company is poised to drive immediate value and potentially boost its share price by addressing the urgent need for sustainable asphalt shingle waste management solutions.

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Asphalt Shingle Roofing Industry

Asphalt shingles are a popular roofing material made from a fibre base, coated with asphalt, and topped with aggregate granules. This combination makes asphalt shingles weather-resistant, durable, and cost-effective. Available in various colours and styles, they are widely used for their ease of installation and low maintenance.

The asphalt shingles industry dominates the North American roofing market, valued at approximately USD 7.31 billion and projected to grow at an annual rate of 3.7% through 2032. In the U.S., around 84% of single-family homes use asphalt shingles. In Canada, the figure is around 75%. Eight major asphalt shingle manufacturers dominate the industry.

Asphalt shingles typically have a lifespan of 15 to 30 years before requiring replacement. However, once discarded, the shingles present a significant environmental issue, as they can take up to 300 to 400 years to decompose in landfills. These shingles not only occupy valuable landfill space but also pose significant environmental risks. A study by the US Environmental Protection Agency found that asphalt shingles can leach harmful chemicals, including polycyclic aromatic hydrocarbons (PAHs), into the surrounding soil and water.

With few options for handling discarded shingles other than sending them to landfills, approximately 16.5 million tons of asphalt shingles are disposed of annually across North America, with most of this waste being sent to landfills in the U.S. and Canada, including around 1 million tons of scrap generated by shingle manufacturers. To put this in perspective, this volume of waste is equivalent to filling nearly 750,000 garbage trucks annually, making asphalt shingles the one of largest materials in construction and demolition waste in North America.

Currently, only 10% of asphalt shingles are recycled each year, with the main application being in road construction. However, in response to growing concerns, some regions have recently begun implementing bans or restrictions on the use of recycled asphalt shingles (RAS).

Asphalt Manufacturing Industry Recycling Ambitions

The Asphalt Roofing Manufacturers Association (ARMA), representing leading North American manufacturers, has set ambitious targets to reduce landfill disposal of asphalt-based roofing materials by 50% by 2035 and eliminate nearly all waste by 2050. Given that the current recycling rate for asphalt shingles is just 6% of the total waste generated each year, this goal is monumental.

Currently, no existing technology can effectively address this challenge, creating a significant market opportunity for companies like Northstar Clean Technologies. To meet ARMA's 50% reduction target by 2035, Northstar would need to build over 200 facilities, a strategy that will be explored in more detail later.

Challenges in Recycling Asphalt Shingles

Recycling asphalt shingles presents several technical challenges due to their complex composition and durability, including:

• Separation Difficulty: The strong bond between asphalt and aggregate makes it challenging and time-consuming to separate these materials. Effective separation often requires advanced, specialised equipment, which adds both complexity and cost.

• Quality Control: Ensuring that recycled asphalt meets the stringent specifications for high-quality paving. Unlike virgin asphalt, which is tightly controlled during production, recycled asphalt can show variability in its physical properties, making it difficult to meet the rigorous standards required for certain paving applications.

• Shredding Issues: Shredding shingles in bulk is problematic due to the high concentration of granular materials, which act like abrasive sandpaper. This creates difficulties when moving, separating, or processing large volumes, leading to operational inefficiencies and increased wear on equipment, ultimately driving up costs.

  

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Northstar Clean Technologies - Leading the Charge

Northstar Clean Technologies, a Canadian-based and dual-listed manufacturing cleantech company, is tackling the mounting waste issue by capturing and reprocessing discarded asphalt shingles, allowing them to be transformed into valuable materials for use in the manufacturing industry once again.

Through its innovative, patented Bitumen Extraction & Separation Technology (BEST), Northstar Clean Technologies efficiently separates asphalt shingles into their three core components—high-value liquid asphalt, aggregate, and fibres—achieving an impressive 99% yield. The high-value liquid asphalt derived from Northstar’s process is resold across a range of industries including road paving, asphalt shingle production, and hot-mix asphalt production. Meanwhile, the lower-value materials will be used within their respective industries.

The BEST patented process is specifically designed to handle the complex structure of asphalt shingles by integrating heat, mechanical separation, and chemical processes to break down shingles and efficiently separate their components. The process consists of 15 distinct stages, organised into 7 key phases, from start to finish:

• Preparation: Shingles are sorted/cleaned to remove contaminants like nails and debris.

• Shredding: The shingles are shredded into approximately 1-inch squares.

• Water Separation: The shredded material is placed into a vessel where room-temperature water is applied. This high-pressure water primarily separates the aggregate from the shredded material.

• Agitation and Separation: The mix is agitated, causing the sand to settle at the bottom while the oil and fibres float to the top. The sand is collected from the tank's bottom, and the water is recirculated for continuous use.

• Dilution: The remaining oil and fibre mixture is transferred to a new tank where a solvent is added to thin the oil by mixing it with the diluent.

• Pressing: The oil/solvent mixture is then squeezed out of the remaining fibre using screw presses.

• Distillation: Finally, the oil/solvent mixture is passed through a distillation tower to separate the solvent from the oil, with the solvent then recirculated for reuse.

During 2022, Northstar operated and refined its asphalt shingle recycling process at its pilot plant in Delta, British Columbia, continuously fine-tuning the process to achieve optimal yields and maximise economic potential. In 2023 and 2024, the company used the facility for equipment manufacturing and testing as well as providing more samples to offtakers.

These efforts were further supported by the company’s partnership with BBA Engineering, a renowned firm with over 40 years of expertise in the Energy and Natural Resources sectors, which completed the independent engineering design of Northstar’s modular facility. With this strong foundation and the extensive groundwork laid, the company is well-positioned to successfully commission its first commercial-scale facility in Calgary. This is in addition to the extensive R&D and engineering contributions from McAsphalt and TAMKO.

Northstar also had its recovered liquid asphalt tested by an independent third-party laboratory, which confirmed that its quality and penetration rate met the acceptable standards for sale to end-user customers.

Diverse Revenue Streams

Each Northstar facility will generate revenue through multiple key channels, which together support the unit's strong financial viability which will be showcased later in the report.

Tipping Fees

Representing 36% of a facility's revenue stream (with a near 100% profit margin), Northstar charges tipping fees to those who offload asphalt shingle waste at their facilities, positioning the company as both a waste management provider and a recycling manufacturer. Clients who drop off discarded shingles include shingle manufacturers, construction and demolition companies, homeowners, waste management firms, and, crucially, municipal governments that divert asphalt shingles from local waste collection facilities to Northstar's locations.

Tipping fee prices charged will vary depending on the location of each facility. For instance, in Calgary, it currently costs CAD 113 per tonne to dispose of asphalt shingles at the municipal landfill whereas in Vancouver it costs CAD 150 per tonne. As landfill capacity continues to diminish, tipping fees are expected to keep rising, having already increased by 25.5% since January 2016. To encourage drop-offs at Northstar facilities, the company will offer a discounted tipping fee, such as CAD 85 per tonne in Calgary, representing a 25% savings compared to the municipal rate.

To ensure a consistent supply of shingles at each facility, Northstar Clean Technologies will arrange feedstock agreements with key partners, such as Ecco Recycling, which will supply 20,000 tonnes of shingle waste annually to Northstar’s Calgary facility.

While construction and demolition companies may contribute a smaller share of shingle feedstock compared to diversion agreements, Northstar's facilities provide a key advantage in terms of time efficiency. Drop-offs at district landfill sites often involve long wait times due to mixed waste processing and heavy truck traffic. In contrast, Northstar’s streamlined process reduces unloading times, making it a more time-effective option, even if it’s located slightly farther away.

Liquid Asphalt Sales

Revenue from liquid asphalt produced at Northstar facilities accounts for approximately 61% of the total projected income per facility. Northstar has conservatively projected a price of CAD 650 per tonne for liquid asphalt, while current industry prices range between CAD 700 and 1,100 per tonne.

Although the prices of Northstar's offtake agreements with McAsphalt and TAMKO are not publicly disclosed, they are expected to be index-based, with final pricing adjusted for factors such as location and quality variations. Additionally, there is further price upside, as Northstar’s liquid asphalt is likely to command a premium due to its strong ESG attributes.

Following Northstar’s extensive groundwork from their pilot plant in 2022, the company has sent samples of their liquid asphalt to several potential offtake companies. These companies have assessed its integration into their manufacturing processes and provided highly positive feedback.

Aggregate Sales

The aggregate, mainly composed of sand and small stones, contributes a smaller share of a facility's revenue. It will be sold to regional construction, paving and landscaping companies.

Fibre Sales

Extracted fibre will also be sold regionally, most likely to concrete manufacturers. Historically, asphalt shingles used cellulose (paper) for their fibre content, but the industry has recently shifted to using fibreglass mats for their superior performance properties.

Carbon Credits (Untapped potential)

Northstar's Life Cycle Assessment report highlights that its shingle recycling process reduces carbon emissions by 60% compared to traditional asphalt disposal and virgin asphalt production. This translates into a savings of 117.49 kg of CO2 per tonne of feedstock, roughly equivalent to the emissions from driving a gasoline car for 500 km.

To earn carbon credits, Northstar must have its carbon reductions officially verified. The verification process is expected to be completed by early 2027, 18 months after commissioning concludes in Calgary. Each of Northstar’s shingle recycling facilities will require its own carbon credit verification as the associated metrics (transportation, facility energy generation) will be different. However, once Calgary’s assessment criteria are approved, the verification model will have its inputs altered per facility.

Ultimately depending on the justification in which a facility is located, Northstar can generate the following types of carbon credits:

• Verified Carbon Units (VCUs): These are issued for projects that undergo third-party verification (Verra) and can be traded on voluntary carbon markets.

• Compliance Credits: In jurisdictions with mandatory carbon reduction programs, such as cap-and-trade systems, Northstar could generate compliance credits. Regulated entities can use these to meet emission reduction targets.

• Tax Credits: In certain jurisdictions, Northstar may qualify for tax credits as an incentive for reducing emissions. These credits can offset tax liabilities.

While carbon credits are not currently included in Northstar's financial models, they present an untapped opportunity to boost the company's financial performance, depending on the jurisdiction where the credits are generated.

Assessing the potential revenue generation for Carbon credit, the company could generate up to CAD 400,000 per facility however once again this ultimately depends on the jurisdiction and their associated carbon credits program.

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Facility Economics

Each Northstar Clean Technology facility will have its own distinct economic profile shaped by factors such as regional market conditions, supply chains, and offtake agreements. The company has shared detailed financial projections for its Calgary plant, which serves as a benchmark for evaluating the potential performance of future facilities.

Estimated Initial Capex

The initial capital expenditure for the Calgary facility is projected at CAD 17.5 million, inclusive of a 20% contingency. Based on insights gained from Calgary’s construction process, management anticipates that future facilities will require a lower CAPEX, estimated at approximately CAD 15 million.

The rise in CAPEX expenditure from 2022 to 2023 was driven by improvements to Calgary’s operational processes, informed by insights gained at the Pilot Plant facility in Delta and feedback from offtake clients.

Calgary’s Annual Financial Projections

The Calgary facility's economic model is based on processing 150 tonnes of asphalt shingles per day, operating 10 hours a day for 24 days each month. Northstar has also adopted a conservative estimate of CAD 650 per tonne for liquid asphalt.

It’s important to note that Calgary’s financial projections are intentionally conservative, with the sensitivity analysis on the following page clearly showing the significant upside potential that management believes is achievable.

• Increasing TPD Processing Capacity: With improved access to feedstock and operational efficiencies, the facility has the potential to scale its processing capacity from 150 TPD to 200 tpd. This would raise IRR from 31% to 39.9%.

• Expanding to 24-Hour Operations: Northstar plans to expand operations at their Calgary facility to a 20-hour schedule, divided into two 10-hour shifts, compared to the currently modelled one 10-hour day. This adjustment is projected to increase the IRR from 31% to 36.6%.

• Market Price Fluctuations: The liquid asphalt price is conservatively set at CAD 650 per tonne, while the actual market price can vary between CAD 700 and 1,000 per tonne depending on the location. If Northstar sells its asphalt at CAD 800 (+CAD 150) this would boost its IRR from 31% to 36.5%.

Implementing these three core changes would increase Northstar's Project After-tax IRR from 31% to 51%.

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Northstar Facilities

Pilot Plant - Vancouver

Northstar’s Pilot Facility, located in Delta, British Columbia, is strategically positioned just a 10-minute drive from the Metro Vancouver landfill. Currently operating as a proof-of-concept pilot plant site since 2022, the facility has been processing asphalt shingles and distributing recycled material samples to numerous multi-billion-dollar offtake companies which has already secured them offtake agreements with TAMKO and McAsphalt.

Leveraging their well-equipped R&D teams, these companies have thoroughly assessed Northstar’s outputs, providing overwhelmingly positive feedback and confirming that the recycled materials meet industry standards, similar to the validation provided by an independent third party.

Commercial Launch - Calgary

Northstar’s Calgary facility marks a pivotal step as the company’s first full-scale commercial plant, strategically located just 4 km from the City of Calgary’s Southeast Landfill.

The facility is nearing full completion, with all major equipment installed and mechanical work almost finalised. Once completed, the facility will enter its commissioning phase, which is expected to continue through June 2025. During this time, operations will gradually scale up to reach a full production capacity of 41,400 tonnes per year, with a stockpile of feedstock already prepared for processing. It is expected that by 2025, the facility will process 20,000 tonnes.

Successful operations will not only validate the technology at a commercial scale but also provide a blueprint for replication at future sites, driving the company’s expansion. The Calgary plant has also attracted significant interest from potential clients and local governments eager to evaluate its outcomes.

Calgary Feedstock Agreements

• IKO: Northstar has secured a 5-year feedstock agreement with IKO to supply an undisclosed amount of asphalt shingles annually. Previous estimates suggest this could range between 10,000 and 12,000 tonnes per annum.

• Ecco Recycling: A 3-year contract has been signed that will supply 20,000 tonnes annually to Northstar’s Calgary facility.

  • Additionally, Ecco Recycling currently has a waste stockpile of over 500,000 tonnes of shingles located near a planned train station. Both companies will jointly evaluate this stockpile's compatibility with Northstar's BEST technology once the Calgary facility is operational.

• Municipal Engagement: Discussions are ongoing with the City of Calgary to divert asphalt shingles from landfills to Northstar's facility, reinforcing a reliable feedstock supply chain.

• The total feedstock expected from these three partners is expected to be up to 50,000 tonnes per annum. This does not include Ecco’s stockpile.

This feedstock supply does not include material dropped off by construction and demolition companies, which are expected to contribute a reasonable volume of feedstock.

Offtake Agreements

Northstar has secured a 5-year long-term agreement with McAsphalt Industries, Canada’s largest asphalt distributor and a subsidiary of Colas Canada. Under this agreement, McAsphalt will purchase 100% of the liquid asphalt produced, ensuring a stable and predictable revenue stream while reinforcing Northstar’s position as a trusted partner in the asphalt industry. The price of liquid asphalt is based on market rates; however, Northstar has incorporated a risk management mechanism to establish a floor price above the facility's cash flow break-even point.

2026 Expansion Plans

Given the significance of the markets for the next three facilities, there is the potential for each facility to scale to 80,000 tonnes per annum within 6 months of operations.

Northstar's Next Growth Hub - Hamilton, Ontario

Northstar Clean Technologies is advancing plans for its next facility in Hamilton, Ontario, with construction and commissioning targeted for 2026. Hamilton has been identified as a strategic location due to its abundant feedstock supply and proximity to key offtake clients in the Greater Toronto Area (GTA). Northstar has stated there is the potential to establish up to three or four facilities in the region over time, capitalising on its favourable market conditions.

Northstar has recently secured a site in Hamilton, allowing progress on key steps such as federal and provincial grant applications, permitting, and negotiations for feedstock supply and offtake agreements. The region also offers significant economic advantages, including a tipping fee of CAD 121 in Toronto, which is more favourable than the tipping fees in Calgary.

Notably, IKO operates a large asphalt shingle manufacturing facility in Brampton, Ontario, and already has a feedstock agreement with Northstar for their Calgary facility. This existing partnership positions IKO as a potential feedstock supplier for Northstar’s future Hamilton facility. Additionally, Building Products of Canada, now owned by Saint-Gobain, operates an asphalt shingle manufacturing plant in Sarnia, Ontario, which could also supply feedstock.

Strategic Retrofit for Growth - Vancouver

With Vancouver's tipping fees at CAD 150 per tonne, the highest in Canada, Northstar Clean Technologies sees a substantial market opportunity in the region. Management plans to retrofit the existing Delta facility to take advantage of the region's attractive economics. With most permits already in place and the site already established, this presents a compelling expansion option.

Northstar is currently engaging in discussions with feedstock suppliers, offtake clients, and the municipal government, which enforces some of Canada’s strictest ESG regulations.

Located on the US-Canada border, IKO also has a manufacturing facility in Sumas, Washington. As previously stated, Northstar already has a feedstock agreement with IKO for their Calgary facility.

Northstar’s First U.S. Facility in the Mid-Atlantic Region

In 2026, Northstar plans to establish its first U.S. facility in the Mid-Atlantic region, supported by its strategic MOU agreement with TAMKO Building Products. Under this agreement, Northstar may provide asphalt shingle material feedstock to TAMKO’s production facility in Frederick, Maryland at market-based pricing. The two companies have been working closely to identify the ideal location within the Mid-Atlantic, which spans Maryland, Delaware, Pennsylvania, New Jersey, New York, and portions of Virginia and West Virginia.

The average tipping fees in the Mid-Atlantic region are USD 75.92 (approximately CAD 109), presenting an attractive and strategic opportunity for Northstar's expansion.

Additional asphalt shingle manufacturing plants in the region include IKO having a manufacturing plant in Hagerstown, Maryland. Once again, Northstar already has a feedstock agreement with IKO for their Calgary facility. Additionally, Owens Corning and Malarkey Roofing Products both have manufacturing plants in Maryland.

Path to Expansion: Northstar’s Future Facility Locations

Featured on slide 23 of Northstar's Investor Presentation, the company highlights three potential U.S. locations including a facility near Dallas Texas, Chattanooga Tennessee, and Springfield Missouri. While specific details are limited, these sites are likely candidates for expansion in 2027, given their strategic proximity to TAMKO manufacturing facilities.

Choosing future facility locations involves a thorough evaluation of key factors that are critical to financial and operational success. These include but are not limited to:

• A minimum regional population of 1 million inhabitants

• Regional tipping fee prices

• Regional liquid asphalt prices

• Location of asphalt shingle feedstock suppliers and offtakers

• Transportation logistics

• Proximity to existing landfills

• Local waste diversion policies

• Environmental Policies

• Permitting requirements

• Government support for sustainability initiatives

• Corporate Tax Rates

Beyond their first commercial facility in Calgary, Northstar has outlined that bringing a new facility into full-scale production would require approximately 18 months for permitting, 4 months for construction, and 1 month for commissioning. With an aggressive growth strategy, the company aims to construct 3 new facilities annually starting in 2026.

To this end, Northstar has already internally identified its top 10 locations, prioritising regions with favourable economic conditions, including high tipping fees, high liquid asphalt prices and a strong likelihood of securing up to 82,800 tonnes of feedstock annually. Since the CAPEX for Northstar's facilities remains roughly CAD 15 million regardless of whether they process 41,400 tonnes or 82,800 tonnes per year, it is more capital-efficient to prioritise locations with a higher likelihood of securing larger feedstock supplies.

Leveraging its first-mover advantage with the current absence of any major competitor, Northstar is uniquely positioned to select the most optimal locations for securing feedstock and offtake agreements and municipal waste diversion partnerships. If the company can swiftly construct these 10 facilities, Northstar stands to establish a dominant market position and potentially secure a monopoly on asphalt shingle recycling in these regions.

Licensing Opportunities

In regions where tipping fees and liquid asphalt prices provide a less compelling, though still profitable, economic incentive for direct facility construction, Northstar plans to license its technology to recycling centres or waste collection facilities. Licensing agreements provide a highly profitable opportunity by generating revenue streams without the full responsibility for CAPEX and OPEX expenditures.

Before licensing its technology, Northstar plans to construct and operate at least five of its own facilities, making licensing likely to take place in 2028. This extension is to ensure that the technology is completely de-risked and its construction/operations can be consistently applied, allowing for predictable and reliable outputs.

While the company has not provided a great deal on the structure of potential licensing agreements, management has indicated that a facility processing 42,000 tonnes annually could generate approximately CAD 1 million in licensing fees (around 10% of gross revenue).

Facility Locations Based on Metropolitan Population Insights

Assuming Northstar can establish a 41,400 TPA facility in a metropolitan area with a population of around 1 million, and an 82,800 TPA facility in an area with approximately 2 million residents (as Northstar suggests, the Greater Toronto Area could support 3-4 facilities with a population of 6.7 million), The following model outlines potential regional locations for Northstar facilities and provides a breakdown of the number of facilities associated with each region.

As presented in the model, five metropolitan areas could support a 41,400 TPA facility, while 29 metropolitan areas have the capacity to host more than 67 Northstar facilities, each processing 82,800 TPA.

Click the following link below to access the data.

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Facility Funding Strategies

Q3 2025 will be a crucial period for Northstar as potential funding partners evaluate the company's mid-November financial results, comparing Calgary's actual performance with the modelled projections. During this quarter, Northstar is expected to process 10,000 tonnes, with anticipated figures of approximately CAD 2.3 million in revenue, CAD 1.5 million in profit, and CAD 1.2 million in EBITDA. If the company achieves close to these figures, its economic model will be greatly derisked and with potentially significant funding opportunities unlocked.

Strategic Investments - TAMKO

In 2023, Northstar attracted a USD 10 million strategic investment from TAMKO, one of the leading asphalt shingle manufacturers in North America, whereby the company acquired a 19% stake in the company. The strategic investment was split into:

• USD 6.4 million in preferred shares

• USD 3.6 million in convertible debentures. The first USD 1.8 has yet to be converted and the remaining amount is pending upon further completion of certain milestones.

As part of the deal, TAMKO appointed Jeffrey Beyer, COO of TAMKO Building Products, to Northstar’s board. This is a significant move, as Beyer brings extensive expertise in the asphalt shingle market, offering valuable insights into operations and industry dynamics. His appointment strengthens the strategic alignment between the two companies, enhancing collaboration and potentially unlocking more business opportunities, including supply agreements and future acquisitions.

Northstar has an exclusivity agreement with TAMKO to develop four future US facilities, along with potential feedstock supplies and offtake agreements. Both companies are working closely to identify optimal site locations near existing TAMKO plants, ensuring that Northstar can maximise the economic potential of its facilities while strategically benefiting from proximity to TAMKO’s operations. Currently, TAMKO operates 8 facilities across the United States.

Grant Opportunities

Northstar’s future facilities may receive financial support from various local, regional, and national grants.

In 2021, Northstar partnered with Wellington Dupont Public Affairs to assist in engaging federal, provincial, and municipal stakeholders as part of its expansion plans across Canada and the United States. The collaboration also focused on evaluating potential non-dilutive funding strategies, including government grants, to help support the company's expansion efforts.

Northstar has already successfully secured CAD 7.3 million in government grants from Emissions Reduction Alberta and Alberta Innovates for their Calgary facility.

Corporate Debt - BDC

To fund its expansion, Northstar may issue corporate debt, such as bonds or loans, allowing it to raise capital without diluting equity. However, this is more likely to occur as the company strengthens its cash flows from operations.

Northstar has already secured a term sheet with the Business Development Bank of Canada (BDC) for a CAD 8.75 million secured loan to support its Calgary facility. The loan has a 15-year term and a fixed interest rate of 7.95%.

Facility Royalty Agreements - CVW CleanTech Investment

Facility royalty agreements offer an alternative funding approach, where investors provide capital in exchange for a share of the revenue generated by a specific facility.

Northstar has already secured a CAD 14 million investment by CVW CleanTech Investment via a five-year, 10% second-secured convertible debenture. This debenture will convert into a revenue royalty agreement for Northstar's next two facilities after Calgary, entitling CVW CleanTech to 12% of these facility revenues.

Self-funding from Free Cash Flow

As Northstar’s network of facilities expands, the accumulated free cash flow could enable partial self-funding for future plant constructions.

As illustrated in the Discounted Cash Flow model below, if Northstar's initial 4 facilities reach a processing capacity of 77,400 TPA, the accumulated free cash flow from full operations in 2026 would be sufficient to cover the CAPEX for 3 new facilities by 2027. However, since each facility will require time to scale up to the full capacity of 77,400 TPA, it is more likely that Northstar will be able to self-fund new facilities starting in 2028.

Equity Raises

Equity raises involve issuing shares to raise capital, allowing companies to secure funding without taking on debt. However, frequent equity raises can put pressure on the capital structure and affect overall shareholder value.

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Discounted Cash Flow Model Forecasts

The following Discounted Cash Flow (DCF) model evaluates the projected cash flows, revenues, and expenditures for Northstar’s future facilities, presenting the company's Present Value up to 2030. The model also includes a detailed breakdown for each facility, factoring in current tipping fees and indexed asphalt prices.

Key Assumptions in the Discounted Cash Flow Model include:

• Facility Capacity: First 15 facilities at 77,400 TPA each.

• Tipping Fee Discount: 25% off the regional price.

• Index Asphalt Discount: 20% lower than regional price.

• Capital Expenditure per Facility: CAD 15 million.

• PE Ratio: 10.

• Discount Rate: 10%.

Click here to view detailed model assumptions and facility metrics.

The model is built from various data points provided by Northstar, key assumptions and real-world data. It aims to provide a representation of future performance, though the inherent uncertainties mean it may require adjustments.

As Northstar progresses with its operations and additional data is received, the model will be continually updated to reflect these developments.

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Awarded Patents

United States

Northstar has been awarded two patents by the United States Patent & Trademark Office (USPTO), both valid until 2042. These patents were granted without additional engineering or legal challenges, underscoring the uniqueness of Northstar's technology globally.

Canada

Northstar also has a patent for its asphalt shingle reprocessing technology in Canada, which is valid until 2042.

Global

Northstar Clean Technologies has begun the process of securing international patent protection through a Patent Cooperation Treaty (PCT) application, covering potentially 157 contracting states worldwide.

Competing Technologies

RAS (Recycled Asphalt Shingles)

Recycled Asphalt Shingles (RAS) are materials that come from deconstructed old asphalt shingles. These shingles are processed and repurposed for use in hot mix asphalt (HMA) for road construction.

The RAS process involves grinding discarded shingles into smaller pieces and separating their components. The asphalt binder, which hardens over time, is treated to restore its original viscous consistency, enabling it to blend effectively with HMA ingredients.

While RAS typically constitutes 5-10% of the HMA mix, its use faces challenges due to quality variability, issues caused by binder oxidation and limitations on its use in various jurisdictions.

GAF

In 2021, GAF developed three patented processes to recycle shingle waste, which achieves a 90% material recovery rate. This process produces recycled briquettes that currently represent 7% of recycled content in GAF’s Timberline HDZ® RoofCycle™ series.

In June 2022, GAF announced plans for a commercial asphalt shingle recycling facility in Corsicana, Texas, scheduled for completion by the end of 2023. However, as of December 2024, satellite imagery shows no progress. The Texas Department of Licensing and Regulation now lists the project's completion as May 2025. Given the lack of updates and no visible progress since 2022, it appears the project has been delayed or put on hold.

Owens Corning

Owens Corning is advancing two methods for shingle recycling:

1. Shingle Waste to New Shingles: Breaking shingles into their three components

2. Shingle Waste to Asphalt Paving: Repurposing waste for paving applications.

In late 2022, the company announced plans for a pilot facility in Indianapolis in partnership with ASR Systems, CRS Reprocessing Services, and Indiana Shingle Recycling. However, as of now:

• Indiana Shingle Recycling is listed as "temporarily closed" on Google.

• Emails to the Indiana Shingle Recycling bounce back.

• Satellite imagery shows no new facilities at the proposed site since 2022.

Without further updates, it can be assumed that the pilot project is not proceeding. However, Owens Corning's technology has still proven successful in laboratory conditions; therefore, the technology is still validated.

CertainTeed

In 2023, CertainTeed, a subsidiary of Saint-Gobain, acquired the RenuCore™ technology from Asphaltica. This process recycles asphalt shingles into pellets for use in hot-mix asphalt paving. Key advantages of this technology include improved resistance to rutting, shoving, and cracking and enhanced durability and longevity for paved roads.

The technology debuted at the Shingle Recycling Forum in October 2024, with CertainTeed planning to license it to recycling facilities and paving companies. However, its application is limited to paving, and several states restrict or ban the use of recycled shingles in HMA.

SkyQuarry

SkyQuarry has developed a patented process called ECOSolv, which, like Northstar, separates shingles into their components with a 95% yield rate. However, their business model and execution raise concerns.

SkyQuarry plans to establish collection centres across the U.S. to partially process asphalt shingles before transporting them to their Utah facility for final extraction. The refined bitumen is then shipped to their Nevada facility again for further processing.

Concerns about SkyQuarry include:

• Excessive Transport Requirements: The decentralised model significantly increases logistics costs and leads to major feedstock supply issues.

• Credibility Issues: The company raised funds via crowdfunding in 2022 and listed on NASDAQ in October 2024, where its stock has since dropped 70%.

• Lack of Professionalism: Their website lacks detailed growth plans and falls short of professional standards, appearing outdated and underdeveloped.

• Financial Instability: The company has CAD 17.7M in liabilities against a CAD 21M market cap.

Competitive Landscape

Given the vast scale of the shingle waste problem, there are likely to be multiple players in the recycling market. Northstar's success does not rely on building 200+ facilities. As previously highlighted in the DCF model, constructing and operating just 15 strategically located facilities can deliver substantial returns for investors.

Competition for key market locations emphasises the need for Northstar to swiftly expand to secure strategic locations with the best economic conditions.

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Northstar's Leadership Team

Northstar’s management team brings extensive experience across a range of industries, including energy, finance, mining, construction, and corporate governance, providing the company with the expertise to navigate complex challenges and drive future growth.

Despite facing initial hurdles, Northstar’s management team has navigated the financial and operational complexities with impressive skill. They have worked diligently to establish a solid platform foundation, positioning the company for accelerated growth once the Calgary facility demonstrates its viability.

However, to instil greater confidence in the market, management must provide a clearer roadmap for future facilities. Instead of relying on broad statements, a detailed, step-by-step approach outlining specific milestones and actions is needed. This will offer transparency and a clearer understanding of the company’s strategic direction, particularly for 2027 and beyond.

Capital Structure

Northstar currently has 158.8 million shares outstanding, with a fully diluted count of 287 million shares. This dilution represents a substantial increase in the share count and is a factor for investors to carefully consider.

The ownership structure consists of management holding 13%, TAMKO 19%, institutional investors 3%, and retail investors holding the remaining 65%.

Outstanding Options & Warrants

As of September 2024, Northstar has the following share structure

Strategic Funding Since the IPO

Since July 2021, Northstar has raised a total of CAD 67 million, including CAD 30 million from non-dilutive sources and CAD 37 from equity sources. While equity raises remain a possibility for future facilities, the company is progressively positioned to secure non-dilutive funding, as its operations advance and its technology continues to de-risk.

The CAD 37 million in equity funding to date has been raised through:

• 2021: CAD 12.2 million in initial public offering (IPO).

• 2022: CAD 500,000 strategic investment from Renewable U Energy.

• 2023: CAD 10 million strategic investment from TAMKO.

• CAD 14.3 million from convertible notes, options, or warrants.

Importantly, Northstar has secured the majority of its funding from strategic partners, without the continual need of going to retail investors, reflecting strong alignment with key stakeholders and industry leaders.

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Key Risks and Considerations

Disclosure: All investments carry inherent risks, and past performance or projections do not guarantee future results.

Technology Risk: While Northstar's technology platform has been successfully demonstrated at pilot scale, ramping up to full commercial operation will always carry inherent risks. Unexpected technical hurdles at the Calgary facility could lead to lower-than-expected production volumes, inconsistent product quality, or increased operating costs.

Unsustainable Economics: The economic viability of each Northstar facility relies on a delicate balance of numerous factors. Fluctuations in tipping fees and liquid asphalt prices could impact revenues. Securing a consistent supply of asphalt shingles is also crucial to operations. Additionally, operational costs, including labour, utilities, and maintenance, need to be carefully managed whereby unexpected variations could negatively affect profitability.

Permitting Uncertainties: Northstar's expansion plans rely on successfully obtaining permits for each new facility. Delays in the permitting process due to complex regulations, local opposition, or government hurdles could stall construction, increase costs, and ultimately hinder the company's growth trajectory.

Competitor Threats: As the asphalt shingle recycling market is still emerging, new competitors with more efficient or cost-effective platforms could emerge, potentially challenging Northstar's current first-mover advantage. Additionally, securing long-term, exclusive agreements with feedstock suppliers in strategic locations is crucial, and competitors could limit Northstar's access to raw materials and hinder its expansion plans.

Shareholder Dilution: Northstar's ambitious expansion plans require significant capital investment and if the company is required to issue new shares to fund this growth, then existing shareholder ownership will be reduced. This is particularly a concern in the early stages of their commercialisation plans when the company’s profitability may not yet be sufficient enough to fund its fund growth.

Resources & Links

• Northstar Clean Technologies Website

• Northstar Investor Presentation

• Northstar CEO Active Community

• Northstar Youtube Playlist

• CVW Clean Tech

• Asphalt Roofing Manufacturers Association

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Disclaimer: I currently am a shareholder of Northstar and therefore have a vested interest in its success. I was not compensated in any form by the company to create this post.

My opinions are not investment recommendations and should not be relied upon for decisions. Information may be incomplete or subject to change. Investors should conduct their research and consult a qualified adviser.

Investments carry risks, and past performance does not guarantee future results. I am not liable for financial losses based on this material. This content is not an offer or solicitation to buy or sell securities. Readers should verify information independently before acting.