You are exercising options that haven’t vested yet. But because strike and FMV are the same you have no tax liability. So when they beat they become stock and long term capital gains if they become liquid one day.

Here’s the best part - if the company is worth < 50m at the time then you are granted and exercise them, when you sell those stocks one day, you will owe 0 income tax as it’s a “qualified small business stock” - on your first 10m of profit. Wowza’s!