[FINANCIAL INFORMATION](index=3&type=section&id=PART%20I) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Dyadic International, Inc. and its subsidiaries, including balance sheets, statements of operations, stockholders' equity, and cash flows, with detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) | Metric | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :---------------------------------- | :-------------------------- | :-------------------------- | | **Assets** | | | | Cash and cash equivalents | $6,133,398 | $6,515,028 | | Short-term investment securities | $3,964,517 | $748,290 | | Total current assets | $10,502,601 | $8,067,335 | | Total assets | $10,630,372 | $8,219,236 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $1,948,516 | $2,251,781 | | Convertible notes, net | $3,893,602 | — | | Convertible notes, net - related party | $1,557,441 | — | | Total liabilities | $7,462,190 | $2,340,651 | | Total stockholders' equity | $3,168,182 | $5,878,585 | | Total liabilities and stockholders' equity | $10,630,372 | $8,219,236 | - Total assets increased from **$8.2 million** at December 31, 2023, to **$10.6 million** at June 30, 2024, primarily driven by an increase in short-term investment securities and the issuance of convertible notes[9](index=9&type=chunk) - Total liabilities significantly increased from **$2.3 million** to **$7.5 million**, mainly due to the issuance of **$6.0 million** in convertible notes during the period[9](index=9&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development revenue | $385,896 | $793,042 | $720,513 | $1,726,976 | | License revenue | — | $44,117 | — | $88,235 | | Total revenue | $385,896 | $837,159 | $720,513 | $1,815,211 | | Costs of research and development revenue | $301,956 | $792,944 | $445,911 | $1,519,862 | | Research and development expenses | $515,629 | $917,552 | $1,038,352 | $1,728,118 | | General and administrative expenses | $1,607,756 | $1,402,569 | $3,396,350 | $2,882,609 | | Loss from operations | $(2,042,591) | $(2,290,427) | $(4,168,149) | $(4,340,921) | | Net loss | $(2,045,223) | $(2,152,960) | $(4,054,819) | $(3,109,404) | | Basic and diluted net loss per common share | $(0.07) | $(0.07) | $(0.14) | $(0.11) | - Total revenue decreased significantly for both the three-month and six-month periods ended June 30, 2024, primarily due to the winding down of several large research collaborations and the completion of the Janssen license agreement in 2023[12](index=12&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) - Net loss increased for the six months ended June 30, 2024, to **$4.05 million** from **$3.11 million** in the prior year, largely influenced by a decrease in the gain on sale of Alphazyme LLC and increased general and administrative expenses, despite lower R&D expenses[12](index=12&type=chunk)[134](index=134&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | January 1, 2024 | June 30, 2024 | | :---------------------------------- | :-------------- | :------------ | | Common Stock Shares | 41,064,563 | 41,731,141 | | Common Stock Amount | $41,065 | $41,732 | | Additional Paid-In Capital | $105,044,756 | $106,388,505 | | Accumulated Deficit | $(80,277,321) | $(84,332,140) | | Total Stockholders' Equity | $5,878,585 | $3,168,182 | - Total stockholders' equity decreased from **$5.88 million** at January 1, 2024, to **$3.17 million** at June 30, 2024, primarily due to the net loss incurred during the period[14](index=14&type=chunk) - The company issued **666,578 shares** of common stock during the six months ended June 30, 2024, from convertible note conversions, RSU vesting, and stock option exercises[14](index=14&type=chunk)[92](index=92&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,077,354) | $(3,841,654) | | Net cash (used in) provided by investing activities | $(3,127,551) | $3,888,358 | | Net cash provided by financing activities | $5,824,326 | — | | Net (decrease) increase in cash and cash equivalents | $(381,630) | $47,319 | | Cash and cash equivalents at end of period | $6,133,398 | $5,841,591 | - Net cash used in operating activities decreased to **$3.1 million** for the six months ended June 30, 2024, from **$3.8 million** in the prior year, mainly due to a lower net loss and favorable changes in operating assets and liabilities[17](index=17&type=chunk)[140](index=140&type=chunk) - Net cash provided by financing activities was **$5.8 million** for the six months ended June 30, 2024, driven by the issuance of convertible notes, compared to no financing activities in the prior year[17](index=17&type=chunk)[141](index=141&type=chunk) - Cash and cash equivalents decreased by **$0.38 million** to **$6.1 million** at June 30, 2024, primarily due to significant cash used in investing activities for purchasing investment securities, partially offset by financing proceeds[17](index=17&type=chunk)[141](index=141&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1: Organization and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201:%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Dyadic International, Inc. is a global biotechnology company focused on developing gene expression platforms (C1 and Dapibus™) for producing biologic products for human and animal health, as well as non-pharmaceutical applications like food and nutrition[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The company expects to incur losses and negative cash flows from operations as it continues R&D and expands its platforms, relying on capital raises and sublicensing for success[22](index=22&type=chunk) - On March 8, 2024, Dyadic issued **$6.0 million** in 8.0% Senior Secured Convertible Promissory Notes, with net proceeds of **$5.824 million**, to support near-term revenue growth and commercialization efforts[23](index=23&type=chunk)[25](index=25&type=chunk) [Note 2: Cash, Cash Equivalents, and Investments](index=17&type=section&id=Note%202:%20Cash,%20Cash%20Equivalents,%20and%20Investments) | Metric | June 30, 2024 (Fair Value) | December 31, 2023 (Fair Value) | | :---------------------------------- | :------------------------- | :------------------------- | | Cash | $683,233 | $25,775 | | Money Market Funds | $5,450,165 | $6,489,253 | | Short-Term Investment Securities (Corporate Bonds) | $3,962,295 | $748,105 | | Total | $10,095,693 | $7,263,133 | - The company classifies debt securities as held-to-maturity at amortized cost and money market funds as available-for-sale securities, presented as cash equivalents[37](index=37&type=chunk)[39](index=39&type=chunk)[58](index=58&type=chunk) - As of June 30, 2024, and December 31, 2023, no investments were considered other-than-temporarily impaired, and no allowance for credit losses was recorded[58](index=58&type=chunk) [Note 3: Research and Collaboration Agreements, Sublicense Agreements, and Investments in Privately Held Companies](index=17&type=section&id=Note%203:%20Research%20and%20Collaboration%20Agreements,%20Sublicense%20Agreements,%20and%20Investments%20in%20Privately%20Held%20Companies) - Dyadic entered a License and Development Agreement with Proliant Biologicals, LLC on June 27, 2024, for recombinant serum albumin production, with an initial upfront payment of **$0.5 million** received in July 2024[59](index=59&type=chunk)[61](index=61&type=chunk) - Under the Inzymes Agreement, Dyadic recorded research and development revenues of **$0.052 million** and **$0.092 million** for the three and six months ended June 30, 2024, respectively, following an upfront payment of **$0.6 million** in October 2023[62](index=62&type=chunk)[63](index=63&type=chunk) - The Janssen Agreement for therapeutic protein manufacturing was wound down by December 31, 2023, resulting in no revenue recognized from it in the first half of 2024, compared to **$0.044 million** in license revenue and **$0.191 million** in R&D revenue for the three months ended June 30, 2023[66](index=66&type=chunk) - Dyadic received an additional cash payment of **$0.062 million** in Q1 2024 from the sale of its equity interest in Alphazyme, LLC, recorded as a gain on sale[69](index=69&type=chunk) [Note 4: Convertible Notes Payable](index=20&type=section&id=Note%204:%20Convertible%20Notes%20Payable) - On March 8, 2024, Dyadic issued **$6.0 million** in 8.0% Senior Secured Convertible Promissory Notes due March 8, 2027, with **$2.0 million** sold to related parties[70](index=70&type=chunk)[72](index=72&type=chunk) - The notes are convertible into common stock at **$1.79 per share**, and **$0.4 million** of notes were converted into **223,463 shares** of common stock by June 30, 2024[73](index=73&type=chunk) - The company incurred **$0.176 million** in debt issuance costs, amortizing **$0.027 million** as interest expense for the six months ended June 30, 2024[75](index=75&type=chunk) [Note 5: Commitments and Contingencies](index=23&type=section&id=Note%205:%20Commitments%20and%20Contingencies) - Dyadic is not currently involved in any litigation expected to have a materially adverse effect on its financial condition or results of operations[79](index=79&type=chunk) - The company extended its contract with VTT Technical Research Centre of Finland Ltd. to January 31, 2025, for C1 fungal expression system development, with payments totaling **€0.186 million**[80](index=80&type=chunk) [Note 6: Share-Based Compensation](index=23&type=section&id=Note%206:%20Share-Based%20Compensation) - As of June 30, 2024, Dyadic had **5,830,222 stock options** outstanding and **117,925 unvested restricted stock units**, with **2,040,004 shares** available for grant under the 2021 Plan[82](index=82&type=chunk) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Total non-cash share-based compensation expense | $604,081 | $664,955 | | - Stock option expense | $433,807 | $554,914 | | - Restricted stock units expense | $170,274 | $110,041 | - Stock-based compensation expense is recognized based on grant date fair values using the Black-Scholes model for options and closing market price for RSUs, with forfeitures recorded as they occur[83](index=83&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk) [Note 7: Shareholders' Equity](index=27&type=section&id=Note%207:%20Shareholders'%20Equity) - For the six months ended June 30, 2024, **666,578 shares** of common stock were issued at a weighted average price of **$1.61 per share**, including conversions of convertible notes, vesting of restricted stock units, and exercise of stock options[92](index=92&type=chunk) - As of June 30, 2024, the company held **12,253,502 shares** of common stock in treasury at a cost of **$18.9 million**[93](index=93&type=chunk) [Note 8: Subsequent Events](index=27&type=section&id=Note%208:%20Subsequent%20Events) - Management has evaluated subsequent events through August 13, 2024, and is not aware of any material events requiring adjustment or disclosure, except for those already mentioned in the notes[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting business overview, recent developments, critical accounting estimates, and a detailed analysis of revenue, expenses, and liquidity [Overview](index=28&type=section&id=Overview) - Dyadic is a global biotechnology company leveraging its C1-cell and Dapibus™ protein production platforms for human and animal health biopharmaceuticals and non-pharmaceutical applications like food and nutrition[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The company retained co-exclusive rights to the C1-cell platform for human and animal pharmaceutical applications after selling its industrial technology business to Danisco USA in 2015[98](index=98&type=chunk) - Recent developments include a partnership with Proliant Health and Biologicals for recombinant serum albumin, progress in DNASE-1 and recombinant transferrin for non-food applications, and successful development of recombinant alpha-lactalbumin and lactoferrin for food applications[102](index=102&type=chunk)[103](index=103&type=chunk) - In animal health, collaborations with Phibro Animal Health continue, and C1-produced H5 A/Astrakhan ferritin nanoparticle antigen shows potential as a vaccine candidate against avian influenza in poultry and cattle[106](index=106&type=chunk) - In human health, pre-clinical animal testing of an adjuvanted H5 avian influenza ferritin nanoparticle vaccine candidate demonstrated a strong immune response in rabbits, and the C1 Platform successfully expressed multiple infectious disease antigens and delivered mAbs for evaluation[107](index=107&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) - Revenue recognition for research collaborations and agreements follows a 5-step process under ASC Topic 606, primarily using the cost-based input method to measure progress, which requires significant judgment in estimating costs to complete performance obligations[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk) - Accrued research and development expenses are estimated based on open contracts, purchase orders, and communication with personnel, with periodic adjustments[119](index=119&type=chunk) - Stock-based compensation fair value for options is estimated using the Black-Scholes model, considering volatility, risk-free interest rate, and expected life, while RSUs are based on closing market price[120](index=120&type=chunk) - Income taxes are accounted for under the asset and liability method, with a **100% valuation allowance** against deferred tax assets due to a history of operating losses and uncertainty of future taxable income[123](index=123&type=chunk)[124](index=124&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company does not have any off-balance sheet arrangements[126](index=126&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) - The company refers to Note 1 for information on recent accounting pronouncements, including ASU 2023-09 (Income Taxes) and ASU 2023-07 (Segment Reporting), neither of which are expected to have a material impact on financial position or results of operations[54](index=54&type=chunk)[55](index=55&type=chunk)[126](index=126&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development revenue | $385,896 | $793,042 | $720,513 | $1,726,976 | | License revenue | — | $44,117 | — | $88,235 | | Cost of research and development revenue | $301,956 | $792,944 | $445,911 | $1,519,862 | | Research and development expenses | $516,000 | $918,000 | $1,038,000 | $1,728,000 | | General and administrative expenses | $1,608,000 | $1,403,000 | $3,396,000 | $2,883,000 | | Loss from operations | $(2,043,000) | $(2,290,000) | $(4,168,000) | $(4,341,000) | | Net loss | $(2,045,000) | $(2,153,000) | $(4,055,000) | $(3,109,000) | - Research and development revenue decreased for both periods due to the winding down of several large collaborations in 2023, with no license revenue in 2024 after the Janssen agreement completion[126](index=126&type=chunk)[127](index=127&type=chunk) - R&D expenses decreased by **$0.402 million** (three months) and **$0.690 million** (six months) due to the winding down of the DYAI-100 COVID-19 vaccine clinical trial and fewer internal research projects[128](index=128&type=chunk)[129](index=129&type=chunk) - General and administrative expenses increased by **14.6%** (three months) and **17.8%** (six months), driven by higher share-based compensation, legal, and business development expenses[131](index=131&type=chunk) - Net loss for the six months ended June 30, 2024, increased to **$4.055 million** from **$3.109 million**, primarily due to a **$0.957 million** decrease in gain on sale of Alphazyme LLC and increased interest expenses from convertible notes[134](index=134&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) - The company expects to incur losses and negative operating cash flows, with success dependent on technology development, regulatory approval, revenue generation, or sublicensing, and the ability to raise capital[135](index=135&type=chunk) - The **$5.824 million** net proceeds from the **$6.0 million** convertible notes issued in March 2024 are intended for working capital and general corporate purposes, supporting near-term revenue growth and commercialization[136](index=136&type=chunk) - Existing cash, cash equivalents, convertible notes proceeds, investments, and operating cash flows are expected to meet liquidity requirements for at least the next twelve months, though this estimate is based on assumptions that may change[139](index=139&type=chunk) | Metric | June 30, 2024 | December 31, 2023 | | :---------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $6.1 million | $6.5 million | | Investment grade securities (carrying value) | $4.0 million | $0.8 million | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Dyadic International, Inc. is not required to provide quantitative and qualitative disclosures about market risk - Dyadic is a smaller reporting company and is exempt from providing quantitative and qualitative disclosures about market risk[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures, confirming their effectiveness, and notes no material changes in internal controls over financial reporting during the quarter. It also acknowledges the inherent limitations of any control system - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of June 30, 2024[142](index=142&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2024[143](index=143&type=chunk) - The company acknowledges that control systems have inherent limitations, providing only reasonable, not absolute, assurance, and can be circumvented by individual acts, collusion, or management override[144](index=144&type=chunk) [OTHER INFORMATION](index=40&type=section&id=PART%20II) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any litigation that is expected to have a materially adverse effect on its financial condition or results of operations, though it may encounter routine legal proceedings - Dyadic is not currently involved in any litigation believed to have a materially adverse effect on its financial condition or results of operations[146](index=146&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) There have been no changes to the company's risk factors from those disclosed in its Annual Report for the 2023 fiscal year - No changes to risk factors have occurred since the Annual Report for the 2023 fiscal year filed on March 28, 2024[147](index=147&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds for the period - There were no unregistered sales of equity securities and use of proceeds to report[147](index=147&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[147](index=147&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[147](index=147&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) This section discloses that several key executives and directors adopted Rule 10b5-1 trading arrangements during the quarter ended June 30, 2024, for potential sales of common stock - During the quarter ended June 30, 2024, Mark Emalfarb (President and CEO), Jack Kaye (director), Ronen Tchelet (VP of Research and Business Development), and Ping Wang Rawson (CFO) adopted Rule 10b5-1 trading arrangements[148](index=148&type=chunk) - These arrangements include potential sales of up to **1 million shares** for Mr. Emalfarb, **292,367** for Mr. Kaye, **250,000** for Mr. Tchelet, and **282,485** for Ms. Rawson, with various expiration dates[148](index=148&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the report, including corporate governance documents, a license and development agreement, and certifications - Exhibits include the Restated Certificate of Incorporation, Third Amended and Restated Bylaws, and the License and Development Agreement with Proliant Biologicals, LLC[150](index=150&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents, are also filed[151](index=151&type=chunk) [Signatures](index=42&type=section&id=Signatures) - The report was duly caused to be signed on behalf of Dyadic International, Inc. by Mark A. Emalfarb, President and Chief Executive Officer, and Ping W. Rawson, Chief Financial Officer, on August 13, 2024[153](index=153&type=chunk)

JUPITER, Fla., July 30, 2024 (GLOBE NEWSWIRE) -- Dyadic International, Inc. ("Dyadic", "we", "us", "our", or the "Company") (NASDAQ: DYAI), a biotechnology company focused on the efficient large-scale manufacture of proteins for use in human and animal vaccines and therapeutics, as well as in nonpharmaceutical applications including food, nutrition, and wellness, today announced that it will report its financial results for the second quarter 2024 and host a corporate update conference call on Tuesday, Augu ...

Core Insights - Dyadic International, Inc. has entered into a partnership with Proliant Health and Biologicals (PHB) to develop and commercialize animal-free recombinant albumin products, with an upfront milestone payment of $1.5 million and profit-sharing from sales [2][3][12] - The partnership aims to target the approximately $6 billion serum albumin market, focusing initially on recombinant human serum albumin products, with the first product expected to launch in the first half of 2025 [2][3] - Dyadic's protein production platforms, C1 and Dapibus™, utilize the fungus Thermothelomyces heterothallica to produce high-quality proteins sustainably and cost-effectively, supporting applications in various sectors including life sciences and next-generation foods [4][7] Company Overview - Dyadic International is a biotechnology company focused on innovative microbial protein production to meet the growing demand for cost-effective recombinant proteins across industrial, animal health, and human health applications [7] - Proliant Health & Biologicals is a leading supplier of purified proteins, committed to high standards of consistency, traceability, and quality in the market, and is the world's largest manufacturer of purified bovine proteins [5][14] Market Context - The partnership is a strategic move to address the increasing interest and demand for alternative protein sources in the diagnostic and life sciences industries, allowing PHB to expand its product portfolio with animal-free options [12]

Core Insights - Dyadic International, Inc. has entered into a development and commercialization partnership with Proliant Health and Biologicals to enhance their product offerings in the animal-free protein market [1][6][10] - The partnership aims to leverage Dyadic's microbial protein production technology to develop recombinant protein products that can compete with traditional proteins in terms of value and quality [2][6] Company Overview - Dyadic International is a biotechnology company focused on innovative microbial protein production platforms to meet the demand for cost-effective recombinant proteins across various sectors, including industrial, animal health, and human health [7][11] - Proliant Health and Biologicals is a leading supplier of purified proteins, committed to high standards of consistency, traceability, and quality in the market [12] Partnership Details - The agreement includes an upfront milestone payment of $1.5 million to Dyadic, along with a share of profits from the sale of animal-free recombinant albumin products produced using Dyadic's technology [10] - The initial focus of the partnership will be on the commercialization of recombinant human serum albumin products, with the first product expected to launch in the first half of 2025 [10]

Core Insights - Dyadic International, Inc. is a biotechnology company focused on large-scale protein manufacturing for vaccines and therapeutics, as well as non-pharmaceutical applications like food and wellness [3][4]. Event Participation - Dyadic management will attend several industry events in June 2024, including BIO 2024 in San Diego from June 3-6, Future Food Tech-Alt Proteins in Chicago on June 17-18, and the 2024 NIIMBL National Meeting in Washington, DC from June 25-27 [2]. Technology and Platforms - The company utilizes the fungus Thermothelomyces heterothallica for its gene expression and protein production platforms, specifically the C1-cell protein production platform, which aims to reduce costs and improve performance in biologic vaccines and drugs [4]. - Dyadic has developed the Dapibus™ platform for the rapid and large-scale production of low-cost proteins and other biologic products for non-pharmaceutical uses [4]. Product Pipeline - Dyadic is advancing its proprietary microbial platform technologies, including the DYAI-100 COVID-19 vaccine candidate, along with other biologic vaccines and antibodies [5].

Core Insights - Dyadic International, Inc. is a biotechnology company focused on large-scale protein manufacturing for vaccines and therapeutics, as well as non-pharmaceutical applications like food and wellness [3][4]. Event Participation - Dyadic management will attend several industry events in June 2024, including BIO 2024 in San Diego from June 3-6, Future Food Tech-Alt Proteins in Chicago on June 17-18, and the 2024 NIIMBL National Meeting in Washington, DC from June 25-27 [2]. Technology and Platforms - The company utilizes the Thermothelomyces heterothallica fungus for its gene expression and protein production platforms, with the C1-cell protein production platform being a key technology for biologic vaccines and drugs [4]. - Dyadic has developed the Dapibus™ platform for the rapid and cost-effective production of proteins and biologic products for non-pharmaceutical uses [4]. Product Pipeline - Dyadic is advancing its proprietary microbial platform technologies, including the DYAI-100 COVID-19 vaccine candidate, and is focused on developing biologic vaccines, antibodies, and other biological products [5].

Financial Data and Key Metrics Changes - Research and development revenue decreased to approximately $335,000 compared to $934,000 for the same period a year ago, attributed to the winding down of several large research collaborations conducted in 2023 [44] - R&D expenses decreased by 35.5% to approximately $523,000 compared to $811,000 for the same period a year ago, reflecting the winding down of activities related to the company's Phase 1 clinical trial of the DYAI-100 COVID-19 vaccine candidates [46] - Net loss for the quarter was approximately $2 million or $0.07 per share, compared to a net loss of $956,000 or $0.03 per share for the same period a year ago, with the increase in net loss due to the sale of the company's equity interest in Alphazyme LLC for $989,000 in 2023 [47] Business Line Data and Key Metrics Changes - The company generated revenue from 10 collaborations in Q1 2024 compared to seven collaborations in the same period a year ago, indicating an increasing number of collaborations with smaller dollar amounts for individual contracts [45] - The C1 technology continues to attract interest, with significant developments in the human health sector, including a Phase 1 clinical trial demonstrating safety and immune response for the DYAI-100 vaccine candidate [9][10] Market Data and Key Metrics Changes - The global animal-free dairy products market was valued at over $26 billion in 2022 and is projected to reach more than $75 billion by 2032, indicating a significant growth opportunity in the alternative protein sector [34] - The company is experiencing the worst outbreak of H5N1 since 2015, with over 90 million chickens dead in 2022, highlighting the urgency for vaccine development in the animal health sector [28] Company Strategy and Development Direction - The company aims to leverage its microbial protein production platforms, C1 and Dapibus, to craft antigens, antibodies, enzymes, and other recombinant proteins pivotal to human health, animal health, and alternative proteins [16] - The strategic partnership with Rabian BV and the collaboration with ViroVax for the development of a bird flu vaccine exemplify the company's focus on addressing emerging diseases and potential biothreats [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for multiple revenue streams and inflection points through fully funded collaborations and pipeline products [7] - The company is well positioned financially to support near-term revenue growth and accelerate strategic objectives for commercialization in both pharmaceutical and non-pharmaceutical applications [51] Other Important Information - The company successfully closed a $6 million convertible note financing without issuing any warrants, which will fuel the acceleration of its goal to introduce revenue-generating products [15] - The C1-produced COVID-19 monoclonal antibody demonstrated promising results in non-human primate studies, affirming the safety and efficacy of C1-produced antibodies for addressing infectious diseases [17] Q&A Session Summary Question: What milestones need to be achieved before sales of serum human bovine albumin projects? - The main obstacle is scale-up, with initial analytical testing showing equivalence to reference compounds for research and diagnostic segments, while pharmaceutical grade segments have a longer time horizon [61] Question: Will there be milestone payments upon first sale and how is the revenue structured? - Initial milestone payments will be pursued for access to technology and production strain, followed by potential revenue sharing on the back end [63] Question: What are the regulatory plans for DYAI-100? - The company does not plan to move DYAI-100 forward as a COVID-19 booster vaccine, focusing instead on developing better-performing vaccines with higher efficacy [68]

[First Quarter 2024 Overview](index=1&type=section&id=First%20Quarter%202024%20Overview) Dyadic reported Q1 2024 results, emphasizing C1 and Dapibus™ platforms for pharma/non-pharma, successful DYAI-100 Phase 1 trial, and a $6.0 million convertible note [Introduction and Strategic Focus](index=1&type=section&id=Introduction%20and%20Strategic%20Focus) Dyadic announced Q1 2024 results, emphasizing C1 and Dapibus™ platforms for pharma/non-pharma, successful DYAI-100 Phase 1 trial, and a $6.0 million convertible note - Dyadic is a biotechnology company focused on efficient large-scale protein manufacture for human and animal vaccines/therapeutics, and non-pharmaceutical applications (food, nutrition, wellness)[2](index=2&type=chunk) - The company's strategy focuses on near-term pharmaceutical and non-pharmaceutical applications for its proprietary C1 and Dapibus™ protein production platforms[3](index=3&type=chunk) - A key highlight was the successful completion of a Phase 1 clinical trial for DYAI-100, meeting its primary endpoint of safety and reactogenicity, affirming the safety of C1-produced proteins in humans[3](index=3&type=chunk) - Dyadic strengthened its financial position by issuing **$6.0 million** in convertible notes to accelerate near-term revenue-generating products and commercialization opportunities[3](index=3&type=chunk) [Q1 2024 Company Highlights](index=1&type=section&id=Q1%202024%20Company%20Highlights) Q1 2024 highlights include DYAI-100 Phase 1 report, new pharma collaborations, H5N1 vaccine progress, and a $6.0 million convertible note - Final Clinical Study Report issued for First-In-Human Phase 1 clinical trial of DYAI-100, demonstrating safety and antibody response for COVID-19 vaccine candidate[4](index=4&type=chunk) - Entered into several fully funded vaccine and antibody projects covering over twelve targets, with five funded by two of the top ten pharmaceutical companies[4](index=4&type=chunk) - Successfully expressed an H1N1 influenza antigen in collaboration with the Vaccine and Immunotherapy Center at Massachusetts General Hospital[4](index=4&type=chunk) - Announced strategic partnership to develop affordable rabies prophylactics and vaccines using the C1-cell protein production platform[4](index=4&type=chunk) - C1 produced adjuvanted recombinant ferritin nanoparticle H5N1 'Bird Flu' human vaccine candidate demonstrated a strong immune response in animal studies[4](index=4&type=chunk) - Closed a **$6.0 million** convertible note in a private placement with a conversion price of **$1.79** and no warrants[4](index=4&type=chunk) Cash and Investment Grade Securities | As of Date | Amount (Millions) | | :---------- | :---------------- | | March 31, 2024 | $12.1 | [Recent Company Progress](index=3&type=section&id=Recent%20Company%20Progress) Dyadic advanced corporate governance, human and animal health initiatives, and alternative protein developments, securing funding and strategic partnerships [Corporate Events](index=3&type=section&id=Corporate%20Events) Dyadic issued **$6.0 million** in convertible notes and announced leadership changes, appointing a new Board Chairman and Chief Operating Officer - Issued **$6.0 million** in **8.0%** Senior Secured Convertible Promissory Notes due March 8, 2027, in a private placement, including participation from related parties[9](index=9&type=chunk) - Appointed Mr. Patrick Lucy as Chairman of the Board of Directors and promoted Mr. Joe Hazelton to Chief Operating Officer[9](index=9&type=chunk) [Human Health Sector Developments](index=3&type=section&id=Human%20Health%20Sector%20Developments) Dyadic finalized DYAI-100 Phase 1 trial, advanced H5N1 vaccine and C1-produced antibodies, and formed strategic partnerships in human health [DYAI-100 Phase 1 Clinical Trial Results](index=3&type=section&id=DYAI-100%20Phase%201%20Clinical%20Trial%20Results) DYAI-100 Phase 1 trial successfully met its primary endpoint, demonstrating safety, reactogenicity, and immune response in healthy volunteers - DYAI-100 Phase 1 clinical trial met its primary endpoint, demonstrating safety and reactogenicity of the C1-expressed protein in humans[7](index=7&type=chunk) - The vaccine induced immune responses at both dose levels, suggesting potential efficacy against the target virus[7](index=7&type=chunk) [Vaccine and Antibody Collaborations](index=3&type=section&id=Vaccine%20and%20Antibody%20Collaborations) Dyadic reported strong preclinical H5N1 vaccine results, expressed H1N1 antigen, and advanced collaborations for vaccine and monoclonal antibody development - Pre-clinical animal testing of a ferritin nanoparticle H5N1 bird flu recombinant protein human vaccine candidate demonstrated a strong immune response in rabbits[10](index=10&type=chunk) - Successfully expressed H1N1 influenza antigen in collaboration with the Vaccine and Immunotherapy Center at Massachusetts General Hospital, funded by a US **$5.88 million** DoD award[10](index=10&type=chunk) - Entered a funded research collaboration with a top ten pharmaceutical company to develop a vaccine antigen and a monoclonal antibody using C1 technology[10](index=10&type=chunk) - A manuscript of preclinical studies on C1-produced monoclonal antibody in non-human primates and hamsters was published in Nature Communications, demonstrating broad neutralization and potential high protection against SARS-CoV-2 Delta virus[10](index=10&type=chunk) [Strategic Partnerships and Publications](index=3&type=section&id=Strategic%20Partnerships%20and%20Publications) Dyadic formed strategic partnerships for rabies vaccine development, bio-threat solutions, C1 Host Cell Protein ELISA Kit, and recombinant protein evaluation - Dyadic Nederland BV partnered with Rabian BV to develop a rabies vaccine using Dyadic's C1 protein production platform, securing approximately **€1.7 million** in Eurostars funding[10](index=10&type=chunk) - Advanced collaboration with the IIBR and LSRI to leverage microbial platforms for flexible scale protein bioproduction and IIBR's discovery capabilities for emerging disease solutions[10](index=10&type=chunk) - Announced a strategic partnership with Cygnus Technologies® for the development and availability of the C1 Host Cell Protein ELISA Kit[10](index=10&type=chunk) - Signed a fully funded evaluation agreement with an undisclosed leading global biopharmaceutical company to design and produce recombinant proteins using Dyadic's C1 platform[10](index=10&type=chunk) [Animal Health Sector Developments](index=3&type=section&id=Animal%20Health%20Sector%20Developments) Dyadic expanded animal health collaborations, with its H5N1 'Bird Flu' vaccine candidate showing strong immune responses in livestock - Expanded collaboration with Phibro Animal Health/Abic Biological Laboratories Ltd to develop vaccines and treatments for companion and livestock animal diseases[10](index=10&type=chunk) - C1 produced adjuvanted recombinant ferritin nanoparticle H5N1 'Bird Flu' human vaccine candidate demonstrated a strong immune response in animal studies for potential use in poultry, cattle and other animals[10](index=10&type=chunk) - The H5N1 C1 produced bird flu ferritin nanoparticle vaccine elicits high neutralizing antibodies against all three virus isolates (including Texas) of the H5 virus in livestock[11](index=11&type=chunk) [Alternative Proteins Sector Developments](index=5&type=section&id=Alternative%20Proteins%20Sector%20Developments) Dyadic advanced its Dapibus™ platform for alternative proteins, securing albumin agreements, developing cell culture supplements, and progressing dairy enzymes [Dapibus™ Platform and Product Pipeline](index=5&type=section&id=Dapibus%E2%84%A2%20Platform%20and%20Product%20Pipeline) Dyadic's Dapibus™ platform pipeline includes recombinant serum albumin, cell culture supplements, dairy enzymes, and whey proteins, with active sampling and development - Executed a term sheet with a large global albumin manufacturer and distributor to develop and license Dyadic's recombinant serum albumin[22](index=22&type=chunk) - Entered into a co-promotion agreement with Biftek Co. for the promotion of growth media supplement for cell culture[22](index=22&type=chunk) - Undergoing projects to produce recombinant transferrin and recombinant bovine albumin for use in cell culture media and as growth media for the cultured meat industry[22](index=22&type=chunk) - Achieved the specified target yield level for a non-animal dairy enzyme and is progressing with the development of a second enzyme[22](index=22&type=chunk) - Developed a highly productive strain and is actively sampling recombinant alpha-lactalbumin, a whey protein, and negotiating development and commercialization agreements[22](index=22&type=chunk) - Recombinant beta-lactoglobulin and lactoferrin projects are underway, with sampling expected in late Q3 and late Q2/early Q3, respectively[22](index=22&type=chunk) [Financial Highlights for Q1 2024](index=5&type=section&id=Financial%20Highlights%20for%20Q1%202024) Dyadic's Q1 2024 financials show increased cash, decreased revenue and R&D expenses, but higher G&A, leading to a larger net loss [Cash Position](index=5&type=section&id=Cash%20Position) Dyadic's cash, cash equivalents, and investment-grade securities increased to **$12.1 million** as of March 31, 2024, from **$7.3 million** at year-end 2023 Cash Position | Metric | March 31, 2024 | December 31, 2023 | | :------------------------------------------ | :------------- | :---------------- | | Cash, cash equivalents, and investment-grade securities | $12.1 million | $7.3 million | [Revenue Performance](index=5&type=section&id=Revenue%20Performance) Q1 2024 total revenue decreased to **$335,000** from **$934,000** year-over-year, primarily due to the conclusion of large research collaborations Revenue (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Research and development revenue | $335,000 | $934,000 | -64.1% | | License revenue | $0 | $44,118 | -100% | | Total revenue | $334,617 | $978,052 | -65.8% | - The decrease in revenue was primarily due to the winding down of several large research collaborations conducted in 2023[17](index=17&type=chunk) - Revenue was generated from ten collaborations in Q1 2024, compared to seven collaborations in the same period a year ago[17](index=17&type=chunk) [Costs and Expenses](index=5&type=section&id=Costs%20and%20Expenses) Dyadic saw decreased R&D costs due to collaboration wind-downs, but increased G&A expenses from business development and audit fees [Cost of Research and Development Revenue](index=5&type=section&id=Cost%20of%20Research%20and%20Development%20Revenue) Cost of research and development revenue decreased significantly to **$144,000** in Q1 2024, reflecting the winding down of collaborations Cost of Research and Development Revenue (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | | Cost of research and development revenue | $144,000 | $727,000 | -80.2% | - The decrease was due to the winding down of several large research collaborations conducted in 2023[18](index=18&type=chunk) [Research and Development Expenses](index=5&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased by **35.5%** to **$523,000** in Q1 2024, due to the conclusion of DYAI-100 Phase 1 trial activities Research and Development Expenses (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Research and development expenses | $523,000 | $811,000 | -35.5% | - The decrease reflected the winding down of activities related to the Company's Phase 1 clinical trial of DYAI-100 COVID-19 vaccine candidate and a decrease in the amount of ongoing internal research projects[19](index=19&type=chunk) [General and Administrative Expenses](index=5&type=section&id=General%20and%20Administrative%20Expenses) G&A expenses increased by **20.9%** to **$1,789,000** in Q1 2024, driven by higher business development, investor relations, and audit fees General and Administrative Expenses (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------------- | :------------- | :------------- | :----------- | | General and administrative expenses | $1,789,000 | $1,480,000 | +20.9% | - The increase reflected increases in business development and investor relations expenses (approx. **$138,000**), audit fees (**$99,000**), management incentives (**$59,000**), and other increases (**$59,000**)[20](index=20&type=chunk) - These increases were partially offset by decreases in insurance expenses (**$29,000**) and legal expenses (**$17,000**)[20](index=20&type=chunk) [Operating and Net Loss](index=5&type=section&id=Operating%20and%20Net%20Loss) Operating loss slightly increased to **$2,126,000**, while net loss significantly rose to **$2,010,000** due to a non-recurring gain in 2023 Operating and Net Loss (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------------- | :------------- | :------------- | :----------- | | Loss from operations | $(2,126,000) | $(2,050,000) | +3.7% | | Net loss | $(2,010,000) | $(956,000) | +110.2% | | Basic and diluted net loss per common share | $(0.07) | $(0.03) | +133.3% | - The increase in net loss was derived from the sale of the Company's equity interest in Alphazyme LLC for **$989,000** in 2023, which did not recur in 2024[21](index=21&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show decreased revenue, increased net loss, higher total assets and liabilities, and reduced stockholders' equity [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2024 Statements of Operations show decreased total revenue and increased net loss, influenced by winding down collaborations and non-recurring gains Consolidated Statements of Operations (Three Months Ended March 31) | Metric | 2024 | 2023 | | :-------------------------------- | :----------- | :----------- | | Total revenue | $334,617 | $978,052 | | Costs of research and development revenue | $143,955 | $726,918 | | Research and development | $522,723 | $810,566 | | General and administrative | $1,788,594 | $1,480,040 | | Loss from operations | $(2,125,558) | $(2,050,494) | | Net loss | $(2,009,596) | $(956,444) | | Basic and diluted net loss per common share | $(0.07) | $(0.03) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Q1 2024 Balance Sheets reflect increased total assets and liabilities due to convertible notes, alongside a decrease in total stockholders' equity Consolidated Balance Sheets (As of March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $10,569,814 | $6,515,028 | | Short-term investment securities | $1,468,002 | $748,290 | | Total current assets | $12,541,312 | $8,067,335 | | Total assets | $12,681,266 | $8,219,236 | | Total current liabilities | $2,262,119 | $2,251,781 | | Convertible notes, net of issuance costs | $3,884,967 | $0 | | Convertible notes, net of issuance costs - related party | $1,942,484 | $0 | | Total liabilities | $8,165,464 | $2,340,651 | | Total stockholders' equity | $4,515,802 | $5,878,585 | [Company Information and Disclosures](index=6&type=section&id=Company%20Information%20and%20Disclosures) This section provides conference call details, an overview of Dyadic's biotechnology focus, forward-looking statement disclaimers, and contact information [Conference Call Details](index=6&type=section&id=Conference%20Call%20Details) Dyadic scheduled a conference call for May 14, 2024, at 5:00 p.m. ET, to discuss Q1 financial results and business updates - Conference call scheduled for Tuesday, May 14, 2024, at 5:00 p.m. ET[23](index=23&type=chunk) - Dial-in numbers: Toll Free: 877-407-0784; International +1-201-689-8560; Conference ID: 13743568[23](index=23&type=chunk) - Webcast link: https://viavid.webcasts.com/starthere.jsp?ei=1650831&tp_key=0f89478e24, with an archive available within 24 hours[23](index=23&type=chunk) [About Dyadic International, Inc.](index=6&type=section&id=About%20Dyadic%20International%2C%20Inc.) Dyadic International, Inc. is a biotechnology company specializing in large-scale protein manufacture for human/animal health and non-pharmaceutical uses - Dyadic International, Inc. is a biotechnology company focused on efficient large-scale protein manufacture for human/animal vaccines and therapeutics, and non-pharmaceutical applications (food, nutrition, wellness)[24](index=24&type=chunk) - Its gene expression and protein production platforms are based on the highly productive and scalable fungus Thermothelomyces heterothallica[25](index=25&type=chunk) - The lead technology, C1-cell protein production platform, is used to speed development, lower production costs, and improve performance of biologic vaccines and drugs[25](index=25&type=chunk) - The Dapibus™ filamentous fungal based microbial protein production platform is developed for rapid, large-scale, low-cost protein manufacture for non-pharmaceutical applications[25](index=25&type=chunk) [Safe Harbor Regarding Forward-Looking Statements](index=6&type=section&id=Safe%20Harbor%20Regarding%20Forward-Looking%20Statements) This section provides a standard disclaimer for forward-looking statements, outlining inherent risks and uncertainties that may cause actual results to differ - The press release contains forward-looking statements subject to risks, uncertainties, and other factors beyond Dyadic's control[28](index=28&type=chunk) - Risk factors include history of net losses, market and regulatory acceptance, competition, clinical trial results, capital needs, global economic conditions, reliance on IT, dependence on third parties, government regulations, and intellectual property risks[28](index=28&type=chunk) - Dyadic assumes no obligation to publicly update any forward-looking statements after the date of the press release, except as required by applicable law[28](index=28&type=chunk) [Contact Information](index=6&type=section&id=Contact%20Information) Investor inquiries can be directed to Ping W. Rawson, CFO of Dyadic International, Inc., via phone or email - Contact: Ping W. Rawson, Chief Financial Officer, Dyadic International, Inc.[29](index=29&type=chunk) - Phone: (561) 743-8333; Email: ir@dyadic.com[29](index=29&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 000-55264 DYADIC INTERNATIONAL, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 45-0486747 State or ...

Human Health Sector Animal Health Sector Alternative Proteins Sector Corporate JUPITER, Fla., May 14, 2024 (GLOBE NEWSWIRE) -- Dyadic International, Inc. ("Dyadic", "we", "us", "our", or the "Company") (NASDAQ:DYAI), a biotechnology company focused on the efficient large-scale manufacture of proteins for use in human and animal vaccines and therapeutics, as well as non-pharmaceutical applications including food, nutrition, and wellness, today announced its financial results for the first quarter of 2024 and ...