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Dyadic(DYAI) - 2020 Q1 - Quarterly Report
DYAIDyadic(DYAI)2020-05-14 20:10

Financial Performance - Total current assets decreased from 35,639,238asofDecember31,2019,to35,639,238 as of December 31, 2019, to 32,819,441 as of March 31, 2020, a decline of approximately 8.1%[13] - Research and development revenue for the three months ended March 31, 2020, was 315,372,downfrom315,372, down from 402,527 for the same period in 2019, representing a decrease of about 21.6%[15] - Total costs and expenses decreased from 2,843,847inQ12019to2,843,847 in Q1 2019 to 2,697,894 in Q1 2020, a reduction of approximately 5.1%[15] - The net loss for the three months ended March 31, 2020, was 2,214,139,comparedtoanetlossof2,214,139, compared to a net loss of 2,175,258 for the same period in 2019, indicating a slight increase in loss of about 1.8%[15] - Cash and cash equivalents at the end of the period were 4,696,831,adecreasefrom4,696,831, a decrease from 4,823,544 at the beginning of the period, reflecting a decline of approximately 2.6%[21] - The company reported a basic and diluted net loss per common share of 0.08forboththethreemonthsendedMarch31,2020,andMarch31,2019[15]Totalstockholdersequitydecreasedfrom0.08 for both the three months ended March 31, 2020, and March 31, 2019[15] - Total stockholders' equity decreased from 35,864,471 as of December 31, 2019, to 34,252,271asofMarch31,2020,adeclineofapproximately4.534,252,271 as of March 31, 2020, a decline of approximately 4.5%[19] - For the three months ended March 31, 2020, the Company's revenue was 315,000, a decrease of approximately 36.5% compared to 496,000forthesameperiodin2019[40]TheCompanyhadthreecustomersoutsideoftheUnitedStatesthataccountedforapproximately58.0496,000 for the same period in 2019[40] - The Company had three customers outside of the United States that accounted for approximately 58.0% or 183,000 of total revenue for the three months ended March 31, 2020[41] - As of March 31, 2020, accounts receivable totaled 518,601,adecreasefrom518,601, a decrease from 558,530 as of December 31, 2019[50] - The Company had cash and cash equivalents sufficient to fund operations for at least the next twelve months, but may seek additional funding if necessary[33] - The Company recognized revenue based on a cost-based input method, reflecting actual costs incurred relative to budgeted costs[57] - The allowance for doubtful accounts was zero as of March 31, 2020, indicating that substantially all accounts receivable were current[49] - Research and development costs for the three months ended March 31, 2020, totaled 755,453,comparedto755,453, compared to 1,081,843 for the same period in 2019, reflecting a decrease of approximately 30%[66] - General and administrative expenses rose by 15.8% to approximately 1,653,000comparedto1,653,000 compared to 1,428,000 for the same period last year, driven by increases in insurance and outside service costs[185] - Interest income decreased by 37.1% to approximately 168,000comparedto168,000 compared to 267,000 for the same period in 2019, attributed to lower interest rates on investment grade securities[186] - Net cash used in operating activities for the three months ended March 31, 2020, was approximately 2.0million,primarilyduetothenetlossandchangesinoperatingassetsandliabilities[191]ResearchandDevelopmentThecompanyaimstoenhanceitsproprietaryC1technologyforthebiopharmaceuticalindustry,focusingonthedevelopmentofbiologicvaccinesanddrugs[27]DyadichasretainedcoexclusiverightstotheC1technologyforhumanandanimalpharmaceuticalapplicationsfollowingthesaleofitsindustrialtechnologybusinesstoDuPont[26]Thecompanyistargetingthedevelopmentofinnovativevaccines,drugs,biosimilars,andbiobettersusingitsC1technology[27]TheCompanyhasnopharmaceuticalproductsapprovedforsaleandgeneratesrevenuesolelyfromresearchcollaborationsandgovernmentgrants[55]TheCompanyhasestablishedadeferredrevenuefromlicensingagreementsforupfrontfeesreceivedpriortotechnologytransfer[63]TheCompanyhasnotdisclosedthevalueofunsatisfiedperformanceobligationsforcontractswithanoriginalexpectedlengthofoneyearorless[64]DyadicenteredintoastrategicresearchcollaborationwithBDI,committingEUR1millionforthedevelopmentofC1basedproductcandidates[94]BDIisobligatedtospendaminimumofEUR936,000overtwoyearsontheresearchprojectundertheRSA[94]ThecompanyextendeditsresearchcontractwithVTTforatotalofEUR2.52millionoverthreeyearstodeveloptheC1fungalexpressionsystem[113]AnadditionalEUR690,000wasaddedtotheVTTcontracttoreinforceglycoengineeringwork,withfurtherexpansionofEUR700,000announcedonMarch23,2020[113]DyadichasenteredintoafundedcollaborationwithatopfouranimalhealthcompanyforafeasibilitystudyonproducingtwoproteinsusingtheC1platform,withthreeofthetopfouranimalhealthcompaniescurrentlyfundingresearchprograms[140]AnewfeasibilitystudyhasbeeninitiatedwiththeUniversityofOslofocusedoninfluenzavaccinedevelopment[142]ThecollaborationwiththeIsraelInstituteforBiologicalResearchhasexpandedtoexplorethepotentialofC1forexpressinggenesequencesintorVaccinecandidatesandmonoclonalantibodiestocombatCOVID19[143]DyadicsC1platformisbeingutilizedforvaccinecandidatesdevelopedbyUfovaxandscientistsfromtheEUZAPIinitiative[144]COVID19ImpactTheCompanyisactivelypursuingCOVID19relatedvaccineandantibodyopportunities,collaboratingwithvariousresearchinstitutions[32]TheCompanyiscompetingwithmoreexperiencedcompaniesforgrantsorfundingrelatedtoitsCOVID19initiatives,withnoassuranceofsuccess[32]TheongoingCOVID19pandemichassignificantlyimpactedbusinessoperations,potentiallyaffectingresearchprojectsandfinancialconditions[206]TheCompanyiscurrentlyexploringseveralCOVID19relatedvaccineandantibodyopportunities[209]ThereisnoassurancethattheC1technologywillsuccessfullyproduceavaccineorantibodythatentersclinicaltrials[209]TheCompanyhasnotsecuredanygrantsorfundingfromitsproposalsrelatedtoCOVID19[209]Thereisuncertaintyregardingtheabilitytoobtaingovernmentalsafetyandregulatoryapprovalsforanyproductsdeveloped[209]StockandEquityAsofMarch31,2020,thecompanyhad4,663,390stockoptionsoutstanding,withaweightedaverageexercisepriceof2.0 million, primarily due to the net loss and changes in operating assets and liabilities[191] Research and Development - The company aims to enhance its proprietary C1 technology for the biopharmaceutical industry, focusing on the development of biologic vaccines and drugs[27] - Dyadic has retained co-exclusive rights to the C1 technology for human and animal pharmaceutical applications following the sale of its industrial technology business to DuPont[26] - The company is targeting the development of innovative vaccines, drugs, biosimilars, and biobetters using its C1 technology[27] - The Company has no pharmaceutical products approved for sale and generates revenue solely from research collaborations and government grants[55] - The Company has established a deferred revenue from licensing agreements for upfront fees received prior to technology transfer[63] - The Company has not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or less[64] - Dyadic entered into a strategic research collaboration with BDI, committing EUR €1 million for the development of C1 based product candidates[94] - BDI is obligated to spend a minimum of EUR €936,000 over two years on the research project under the RSA[94] - The company extended its research contract with VTT for a total of EUR €2.52 million over three years to develop the C1 fungal expression system[113] - An additional EUR €690,000 was added to the VTT contract to reinforce glycoengineering work, with further expansion of EUR €700,000 announced on March 23, 2020[113] - Dyadic has entered into a funded collaboration with a top four animal health company for a feasibility study on producing two proteins using the C1 platform, with three of the top four animal health companies currently funding research programs[140] - A new feasibility study has been initiated with the University of Oslo focused on influenza vaccine development[142] - The collaboration with the Israel Institute for Biological Research has expanded to explore the potential of C1 for expressing gene sequences into rVaccine candidates and monoclonal antibodies to combat COVID-19[143] - Dyadic's C1 platform is being utilized for vaccine candidates developed by Ufovax and scientists from the EU ZAPI initiative[144] COVID-19 Impact - The Company is actively pursuing COVID-19 related vaccine and antibody opportunities, collaborating with various research institutions[32] - The Company is competing with more experienced companies for grants or funding related to its COVID-19 initiatives, with no assurance of success[32] - The ongoing COVID-19 pandemic has significantly impacted business operations, potentially affecting research projects and financial conditions[206] - The Company is currently exploring several COVID-19 related vaccine and antibody opportunities[209] - There is no assurance that the C1 technology will successfully produce a vaccine or antibody that enters clinical trials[209] - The Company has not secured any grants or funding from its proposals related to COVID-19[209] - There is uncertainty regarding the ability to obtain governmental safety and regulatory approvals for any products developed[209] Stock and Equity - As of March 31, 2020, the company had 4,663,390 stock options outstanding, with a weighted average exercise price of 2.44 and an aggregate intrinsic value of 13,017,190[116]TotalnoncashstockoptioncompensationexpenseforthethreemonthsendedMarch31,2020,was13,017,190[116] - Total non-cash stock option compensation expense for the three months ended March 31, 2020, was 426,939, compared to 309,563forthesameperiodin2019,reflectinganincreaseofapproximately37.9309,563 for the same period in 2019, reflecting an increase of approximately 37.9%[126] - The company issued 100,000 shares of common stock due to the exercise of stock options at a weighted average issue price of 1.78 per share during the three months ended March 31, 2020[127] - The company recognized share-based compensation expenses of 380,251ingeneralandadministrativeexpensesand380,251 in general and administrative expenses and 46,688 in research and development expenses for the three months ended March 31, 2020[126] - The company has retained co-exclusive rights to the C1 technology for human and animal pharmaceutical applications after the DuPont Transaction, which was valued at 75million[136]Dyadicwillreceivea2075 million[136] - Dyadic will receive a 20% equity interest in Novovet under the Luina Bio Sub-License Agreement, contingent on future net sales and revenue[99] - The Alphazyme Sub-License Agreement includes a 7.5% ownership interest for Dyadic upon successful technology transfer, with additional milestone payments[105] Financial Position - As of March 31, 2020, deferred tax assets were approximately 9.6 million, with a 100% valuation allowance established due to operating losses[75] - The Company reported cash and cash equivalents of 4,696,831asofMarch31,2020,withtotalinvestmentsamountingto4,696,831 as of March 31, 2020, with total investments amounting to 33,673,423[86] - The company does not consider any of its investments to be other-than-temporarily impaired as of March 31, 2020[90] - As of March 31, 2020, the company held 12,253,502 shares of common stock in treasury, at a cost of approximately 18.9million[129]TheexpectedstockpricevolatilityforoptionsgrantedduringthethreemonthsendedMarch31,2020,rangedfrom39.9418.9 million[129] - The expected stock price volatility for options granted during the three months ended March 31, 2020, ranged from 39.94% to 51.22%[123] - The company continues to monitor the potential effects of the COVID-19 pandemic on its financial condition and operations[132] - The Company expects to receive a remaining tax refund of approximately 0.5 million in 2020 pursuant to the CARES Act[74]