4. Stock-Based Compensation

eXoZymes’ 2020 Equity Incentive Plan (the “2020 Plan”), which was approved by the eXoZymes shareholders, permits grants to its officers, directors, and employees for up to 938,832 shares of eXoZymes’ Common Stock. On May 1, 2023, the board and shareholders approved an increase of 1,558,175 shares under the plan. The 2020 Plan authorizes the issuance of stock options, shares of restricted stock, and restricted stock units, among other forms of equity-based awards. On July 25, 2025, the Company’s shareholders approved, by a majority, the “2025 equity incentive plan”. The new plan allows for an additional 1,250,000 shares to be added to the equity incentive pool.

The Company measures the fair value of stock option awards using the Black-Scholes model, which requires the use of certain subjective assumptions, including expected term, expected volatility, and risk-free interest rate. These inputs are based on historical data and market conditions at the time of grant. The assumptions used for stock option grants during the periods presented are summarized in the table below:

 Schedule of Stock Option Grants

Note: Contractual term (7 years), dividend yield ($0), and valuation methodology were identical for all grants and therefore are not included in the table.

On November 15, 2025, an option holder exercised 15,000 vested stock options through a cashless exercise at an exercise price of $3.31 per share. A total of 3,439 shares were withheld to cover the exercise consideration, resulting in the issuance of 11,561 shares. No unvested options remained following this transaction.

During the three months ended March 31, 2026, option holders exercised a total of 89,742 vested stock options through cashless exercises. Of this amount, 81,951 options were exercised at an exercise price of $3.31 per share, and 7,791 options were exercised at an exercise price of $2.44 per share. In connection with these exercises, a total of 27,433 shares were withheld to cover the exercise consideration, resulting in the issuance of 62,309 shares. All options exercised during the period were fully vested, and no unvested options remained following these transactions.

As of March 31, 2026, stock options to purchase 971,797 shares of Common Stock were vested, the weighted average exercise price is $5.93, the aggregate intrinsic value is $2,351,078 and the weighted average remaining contractual term is 4.68 years. The stock options were issued in 2021, 2023 and 2024 and had a vesting term of five years with an expiry of seven years. eXoZymes stock-based compensation were $501,101 and $317,277 for the three months ended March 31, 2026, and 2025. As of March 31, 2026, the unrecognized stock-based compensation is $5,119,985.

A summary of stock option activity during the three months ended March 31, 2026, and December 31, 2025, is presented below:

Schedule of Stock Options Activity 

On July 19, 2021, eXoZymes granted 81,118 restricted stock units (“RSUs”) at a value of $2.44 per share. These RSUs were issued in 2020 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up, or upon the change of control of the Company by eXoZymes, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period on November 11, 2025, or upon the change of control of eXoZymes. The lockup period was extended on November 10, 2025. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $164,236.

On March 28, 2022, eXoZymes granted 241,718 restricted stock units (“RSUs”) at a value of $2.44 per share. These RSUs were issued in 2021 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up, or upon the change of control of the Company by eXoZymes, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period on November 11, 2025, or upon the change of control of eXoZymes. The lockup period was extended on November 10, 2025. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $588,709.

On May 1, 2023, eXoZymes granted 100,820 restricted stock units (“RSUs”) at a value of $3.32 per share. These RSUs were issued in 2023 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up, or upon the change of control of the Company by eXoZymes, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period, on November 11, 2025, or upon the change of control of eXoZymes. The lockup period was extended on November 10, 2025. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $334,711.

On July 1, 2025, eXoZymes granted 20,000 restricted stock units (“RSUs”) at a value of $9.48 per share, which was equal to the fair value of the Common Stock on the date of grant and are exercisable for a period of 7 years. The RSUs vest monthly over a 12-month period.

On November 10, 2025, eXoZymes extended the lock up period for current employees that had unvested RSU’s. The Lock Up Agreement extends the lock up period to April 1, 2026, as to all of the Common Shares (the “RSU Shares”), and thereafter one-twelfth (1/12) of the RSU shares will be permanently released from the provisions of the Lock Up Agreement on the first of each month, starting as of Thursday, April 1, 2026 and continuing until the last release date of March 1, 2027. The extension of the Lock Up Agreement was voluntary and of the 424,656 restricted stock units individuals holding 7,870 chose to exercise their Restricted Stock Units and converted to common stock on November 14, 2025.

On March 18, 2026, the Company issued 10,002 shares of its common stock to an individual upon the vesting and settlement of previously granted Restricted Stock Units (“RSUs”), in accordance with the terms of the Company’s equity incentive plan. The shares were issued on a one-for-one basis for each vested RSU and were issued on a gross basis.

 Schedule of Restricted Stock Units Activity