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What changed in DYADIC INTERNATIONAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DYADIC INTERNATIONAL INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+326 added−278 removedSource: 10-K (2025-03-26) vs 10-K (2024-03-28)

Top changes in DYADIC INTERNATIONAL INC's 2024 10-K

326 paragraphs added · 278 removed · 202 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

57 edited+53 added−36 removed10 unchanged
Biggest changeWe continue to generate a growing amount of data that demonstrates different C1-produced proteins are properly folded and are biologically active: ● Further development of DYAI-100 (SARS-CoV-2 RBD) vaccine candidate by preparing C1 cell lines that express and produce effective antigens against different variants of the SARS-CoV-2 RBD in order to implement the FDA recommendation to produce annual multivalent vaccines against SARS-CoV-2 that are suitable for the annual global threat. ● Developing additional antigens that were produced by C1 (e.g., SARS-CoV-2 Full Spike Protein, hemagglutinin (HA) and Neuraminidase (NA)) which were not only produced at high levels, but they were also importantly shown to be safe, effective, and protective in several animal trials and in the case of influenza a challenge test carried out by Oslo University demonstrated the potential of C1 produced antigens for seasonal and pandemic influenza. 7 ● Developing C1-cells to express complex proteins such as conjugating antigens to ferritin nanoparticles, scFv (MHCII) and trimerization domains to increase efficacy. ● Developing the C1-cell protein production platform for expressing mAbs at relatively high levels and high quality (e.g., data from more than one large pharma collaborator demonstrated that the binding kinetics of mAbs produced from C1 are virtually indistinguishable from the binding kinetics of reference mAbs which were produced in CHO cells). ● Success in glycoengineering C1 cells to express mAbs that have human-like glycan structures. ● Expressed a number of third-party monoclonal antibodies (mAbs) which were assayed by multiple third parties who reported that the neutralizing and binding activity assays demonstrated great similarity between C1-produced mAb and CHO-produced mAbs. ● Expressed a number of other types of therapeutic proteins, such as bi-specifics, tri-specifics and Fc-fusion proteins, at relative high yields compared to other production hosts and high quality (e.g., expressed a third party bi-specific antibody which was assayed by the third party in an in vitro cellular activity assay which indicated that dose response curves for the C1 expressed bi-specific antibody were very similar to the CHO expressed bi-specific antibody). ● Developed the C1-cell protein production platform to express human and bovine serum albumin and other recombinant proteins with therapeutic, drug formulation, and research diagnostic applications.
Biggest changeKey initiatives include improving C1 genetic tools, reducing background protease levels, precision engineering high-expression C1 cell lines, developing C1-expressed vaccine and drug candidates, and glycoengineering C1 cells for mammalian-like glycosylation. 11 Recent advancements demonstrate the platform’s capability to produce properly folded, biologically active proteins: ● Expansion of the platform for human and bovine serum albumin and other recombinant proteins for therapeutic, drug formulation, research, and diagnostic applications. ● Further development of DYAI-100 (SARS-CoV-2 RBD) vaccine candidate, including multivalent antigen expression to align with FDA recommendations for annual SARS-CoV-2 vaccines. ● High-yield production of SARS-CoV-2 Full Spike Protein, hemagglutinin (HA), and neuraminidase (NA), with demonstrated safety and efficacy in animal trials, including an Oslo University challenge study for influenza. ● Expression of complex proteins, including conjugated antigens, scFv (MHCII), and trimerization domains to enhance efficacy. ● Successful monoclonal antibody (mAb) production, with C1produced mAbs showing binding kinetics virtually identical to CHO-produced mAbs. ● Glycoengineering of C1 cells to produce mAbs with human-like glycan structures and third-party validation of C1-produced mAbs' neutralizing and binding activity. ● Production of bi-specifics, tri-specifics, and Fc-fusion proteins at high yields and quality, with C1produced bi-specific antibodies demonstrating similar dose-response activity to CHO produced proteins.
In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or licensed in by Danisco.
In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or in licensed by Danisco.
These arrangements are typically work for hire on an as-needed basis, however, certain of these programs, if negatively impacted due to resource availability, disagreements, or for other reasons could lead to delays or inability to realize our research and commercial objectives.
These arrangements are typically work for hire on an as-needed basis; however, certain of these programs, if negatively impacted due to resource availability, disagreements, or other reasons could lead to delays or inability to realize our research and commercial objectives.
Potential applications to be produced from C1-cells include protein antigens, ferritin nanoparticles, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins. The Company participates in multiple funded research collaborations with certain leading animal and human pharmaceutical companies.
Potential applications to be produced from C1 include protein antigens, ferritin nanoparticles, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins. The Company participates in multiple funded research collaborations with certain leading animal and human pharmaceutical companies.
Item 1. Business Overview Dyadic International, Inc. (“Dyadic”, “we”, “us”, “our”, or the “Company”) is a global biotechnology platform company based in Jupiter, Florida with operations in the United States and a satellite office in the Netherlands, and it utilizes several third-party consultants and research organizations to carry out the Company’s activities.
Item 1. Business Overview Dyadic International, Inc. (“Dyadic”, “we”, “us”, “our”, or the “Company”) is a global biotechnology platform company based in Jupiter, Florida with operations in the United States and a satellite office in the Netherlands, and it utilizes several third-party consultants and contract research organizations to carry out the Company’s activities.
Over the past two plus decades, the Company has developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and has previously licensed this technology to third parties, such as Abengoa Bioenergy SA, BASF SE, Codexis, Inc. and others, for use in industrial (non-pharmaceutical) applications.
Over the past two plus decades, the Company developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and previously licensed this technology to third parties, such as Abengoa Bioenergy SA, BASF SE, Codexis, Inc. and others, for use in industrial (non-pharmaceutical) applications.
This is a collaboration to develop end-to-end solutions to develop, manufacture, commercialize, and distribute affordable vaccines and biologics for human and animal health in underserved African countries. Tech transfer of the C1-cell protein production platform has been completed. Under the license agreement, Dyadic is expected to receive certain marketing rights and other considerations, including milestones and royalty payments, from Rubic.
This is a collaboration to develop end-to-end solutions to develop, manufacture, commercialize, and distribute affordable vaccines and biologics for human and animal health in underserved African countries. Tech transfer of the C1 platform has been completed. Under the license agreement, Dyadic is expected to receive certain marketing rights and other considerations, including milestones and royalty payments, from Rubic.
Danisco retained certain rights to utilize the C1-cell protein production platform in pharmaceutical applications, including the development and production of pharmaceutical products, for which it will be required to make royalty payments to Dyadic upon commercialization.
Danisco retained certain rights to utilize the C1 platform in pharmaceutical applications, including the development and production of pharmaceutical products, for which it will be required to make royalty payments to Dyadic upon commercialization.
Moreover, insoluble expression, a frequent outcome in bacterial expression, is challenging with regard to cost of goods due to the need for refolding and its direct impact on reduced overall yields. • Yeast: In contrast to bacteria, yeast, such as Pichia pastoris , do not produce potentially toxic and pyrogenic cell wall components.
Moreover, insoluble expression, a frequent outcome in bacterial expression, is challenging with regard to cost of goods due to the need for refolding and its direct impact on reduced overall yields and resultant waste streams. • Yeast: In contrast to bacteria, yeast, such as Pichia pastoris , do not produce potentially toxic and pyrogenic cell wall components.
The Company has extended its research contract with VTT multiple times to continue developing Dyadic’s C1-cell protein production platform for therapeutic protein production, including C1 host system improvement, glycoengineering, protease deletion, and management of third-party target protein projects. A significant portion of the research and development activities at VTT are being funded by the Company’s third-party collaborators.
The Company has extended its research contract with VTT multiple times to continue developing C1 for therapeutic protein production, including C1 host system improvement, glycoengineering, protease deletion, and management of third-party target protein projects. A significant portion of the research and development activities at VTT are being funded by the Company’s third-party collaborators.
Awarded by Eurostars for the AVATAR project, a part of the European Partnership on Innovative SMEs, and co-funded by the European Union through Horizon Europe, Rabian will use the total funding leveraging its expertise in virology to develop a rabies vaccine using Dyadic’s C1 protein production platform to tackle the challenges posed by rabies, particularly in lower- and middle-income countries.
Awarded by Eurostars for the AVATAR project, a part of the European Partnership on Innovative SMEs, and co-funded by the European Union through Horizon Europe, Rabian will use the total funding leveraging its expertise in virology to develop a rabies vaccine using C1 to tackle the challenges posed by rabies, particularly in lower- and middle-income countries.
Our success is significantly dependent on our ability to obtain and maintain patent protection for C1 and Dapibus™, both in the United States and abroad. Our patent position and proprietary rights are subject to various risks and uncertainties.
Our success is significantly dependent on our ability to obtain and maintain patent protection for C1 and Dapibus™, both in the United States and abroad. Our patent position and proprietary rights are subject to various risks and uncertainties. Please read the “Item 1A.
These potential competitors include multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, governmental agencies, and other research institutions that are operating in the human health and animal health fields. Moreover, smaller or early-stage companies may emerge as significant competitors, particularly through collaborative arrangements with large, established companies.
These potential competitors include multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, governmental agencies, and other research institutions that are in the operating pharmaceutical sector. Moreover, smaller or early-stage companies may emerge as significant competitors, particularly through collaborative arrangements with large, established companies.
VTT is one of the leading research and technology organizations in Europe, and it has conducted research and development on fungi and other microorganisms for more than three decades. VTT is continuing their development work to further develop our C1-cell protein production platform.
VTT is one of the leading research and technology organizations in Europe, and it has conducted research and development on fungi and other microorganisms for more than three decades. VTT is continuing their development work to further develop C1.
As part of the DuPont Transaction, Dyadic retained co-exclusive rights to the C1-cell protein production platform for use in all human and animal pharmaceutical applications, and currently, the Company has the exclusive ability to enter into sub-license agreements (subject to the terms of the license and to certain exceptions) for use in all human and animal pharmaceutical applications.
As part of the DuPont Transaction, Dyadic retained co-exclusive rights to its proprietary and patented C1 protein production platform (the “C1 platform”) for use in all human and animal pharmaceutical applications, and currently, the Company has the exclusive ability to enter into sub-license agreements (subject to the terms of the license and to certain exceptions) for use in all human and animal pharmaceutical applications.
On February 13, 2024, the Company announced a strategic partnership with Cygnus Technologies®, part of Maravai LifeSciences® (Nasdaq: MRVI), which has developed the C1 Host Cell Protein ELISA Kit for the quality release of products produced using Dyadic’s protein expression platforms.
(3) Pharmaceutical Programs 13 On February 13, 2024, the Company announced a strategic partnership with Cygnus Technologies®, part of Maravai LifeSciences® (Nasdaq: MRVI), which has developed the C1 Host Cell Protein ELISA Kit for the quality release of products produced using Dyadic’s C1 and Dapibus™ platforms.
Further, the genetic tools for yeast development are advanced and enable continued engineering of new strains that may become more suitable than CHO cell lines.
Moreover, the genetic tools for yeast production are advanced and enable continued engineering of new strains that may become more suitable than CHO cell lines.
Disadvantages include the typically lower protein titers than C1-cells and traditional yeast cells have a greater number of higher N and O glycosylation structures. • Insect cells: Insect cells (i.e., Baculovirus) offer protein expression with post-translational modifications like mammalian cells, ease of scale-up, and simplified cell growth readily adapted to high-density suspension culture for large-scale expression.
Disadvantages include lower protein production of select targets and traditional yeast cells have a greater number of higher N and O glycosylation structures. • Insect cells: Insect cells (i.e., Baculovirus) offer protein expression with post-translational modifications like mammalian cells, ease of scale-up, and simplified cell growth readily adapted to high-density suspension culture for large-scale expression.
Please read the “Risk Factors” in Item 1A of this Annual Report for information about certain risks and uncertainties that may affect our patent position and proprietary rights. We also rely upon unpatented confidential information to remain competitive. We protect such information principally through confidentiality agreements with our employees, consultants, outside scientific collaborators, and other advisers.
Risk Factors” of this Annual Report for information about certain risks and uncertainties that may affect our patent position and proprietary rights. We also rely upon unpatented confidential information to remain competitive. We protect such information principally through confidentiality agreements with our employees, consultants, outside scientific collaborators, and other advisers.
Unlike in human and animal health, several other companies have and are actively engaged in utilizing filamentous fungal microorganisms for the development and manufacture of low-cost proteins, metabolites, and other biological products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.
In non-pharmaceutical applications, several other companies have and are actively engaged in utilizing filamentous fungal microorganisms for the development and manufacture of low-cost proteins, metabolites, and other biological products for use in food, nutrition, and wellness.
Phibro/Abic Sublicense Agreement On February 8, 2022, the Company entered into an exclusive sublicense agreement with Abic Biological Laboratories Ltd. (“Abic”), an affiliate of Phibro Animal Health Corporation (“Phibro”), based on an existing July 1, 2020, non-exclusive sublicense and development agreement (the “Phibro/Abic Agreement”), to provide services for a targeted disease.
In 2024, Rubic began development of several livestock animal vaccines for the African market. 14 Phibro/Abic Sublicense Agreement On February 8, 2022, the Company entered into an exclusive sublicense agreement with Abic Biological Laboratories Ltd (“Abic”), an affiliate of Phibro Animal Health Corporation (“Phibro”), based on an existing July 1, 2020, non-exclusive sublicense and development agreement (the “Phibro/Abic Agreement”), to provide services for a targeted disease.
(“VTT”), a third-party contract research organization, to further modify and improve the Company’s C1-cell protein production platform to ensure a safe and efficient expression system for use in speeding up the development and lowering the cost of manufacturing pharmaceutical products and processes.
(“VTT”), a third-party contract research organization, to further modify and improve C1 to ensure a safe and efficient expression system for use in accelerating development and lowering the cost of manufacturing pharmaceutical and non-pharmaceutical products and processes.
Disadvantages include the longer duration required for cell line development, fermentation, and increased costs associated with process media. • Bacterial: Bacteria such as E. coli are currently the easiest, cheapest, and quickest method for recombinant protein expression and are often used in laboratory settings as well as commercial production of certain non-glycosylated proteins.
Disadvantages include the longer duration required for cell line development, fermentation, and increased costs associated with production media and longer and more costly downstream processing steps. 8 • Bacterial: Bacteria such as E. coli are currently an easy, inexpensive, and rapid method for recombinant protein expression often used in laboratory settings as well as commercial production of certain non-glycosylated proteins.
The Company’s animal-free recombinant serum albumin projects were initiated in late 2022 using Dyadic pharmaceutical cell lines for use in potential therapeutic, product development, research, and/or diagnostic human and animal pharmaceutical applications. Animal-free recombinant serum albumin projects were initiated for use in potential non-pharmaceutical applications such as a component of cell culture media in nutrition, health, and food.
The Company’s animal-free recombinant serum albumin projects were initiated in late 2022 using Dyadic pharmaceutical cell lines for use in potential therapeutic, product development, research, and/or diagnostic human and animal pharmaceutical applications.
Our Industry and Potential Markets Based on feedback received from our collaborators and our ongoing discussions with leading pharmaceutical and biotech companies, contract manufacturing organizations (CMOs), leading academic institutions, as well as U.S. and foreign governmental agencies, we continue to believe that the biopharmaceutical market is an attractive opportunity to apply our C1-cell protein production platform.
Pharmaceutical Applications Based on feedback received from our collaborators and our ongoing discussions with leading pharmaceutical and biotechnology companies, contract manufacturing organizations, leading academic institutions, as well as U.S. and foreign governmental agencies, we believe that the biopharmaceutical market remains an attractive opportunity to apply C1.
For additional discussion on the effect of existing or probable governmental regulations on our business, see “Risk Factors—Risks Related to Government Regulations and Environmental, Social, and Governance Issues.” Employees As of December 31, 2023, the Company had 7 full-time employees, all of whom are located in the United States. 10 Intellectual Property Patents are important to developing and protecting our competitive position.
Risk Factors—Risks Related to Government Regulations and Environmental, Social, and Governance Issues.” Employees As of December 31, 2024, the Company had 6 full-time employees, all of whom are located in the United States. Intellectual Property Patents are important to developing and protecting our competitive position.
Our Research Partners and Contract Research Organizations (CROs) Currently, the Company is conducting its C1-cell protein production platform research and other internal and external third-party programs with several contract organizations as follows: (1) Research and Development Agreement with VTT Technical Research Centre of Finland, Ltd ( “ VTT ” ) Since September 2016, the Company has been working with VTT Technical Research Centre of Finland, Ltd.
Baculovirus), yeast and other traditional expression systems for the production of proteins used in vaccines, therapeutics, diagnostics, and other biologic products. 10 Our Research Partners and CROs Currently, the Company is conducting its C1 research and other internal and external third-party programs with several contract research organizations as follows: (1) Research and Development Agreement with VTT Technical Research Centre of Finland, Ltd Since September 2016, the Company has been working with VTT Technical Research Centre of Finland, Ltd.
Available Information Information that we furnish to or file with the SEC, including the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are made available for download, free of charge, through the Company’s website at www.dyadic.com as soon as reasonably practicable.
In the case of our employees, these agreements also provide, in compliance with relevant law, that inventions and other intellectual property conceived by such employees during their employment shall be our exclusive property. 15 Available Information Information that we furnish to or file with the SEC, including the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are made available for download, free of charge, through the Company’s website at www.dyadic.com as soon as reasonably practicable.
However, our competitors using other protein production platforms who are significantly larger and better capitalized than us, could potentially adopt strategies similar to our and even implement them at a faster pace.
Currently, we are not aware of other companies pursuing a business model similar to what we are developing with our protein production platforms. However, our competitors using other protein production platforms who are significantly larger and better capitalized, could potentially adopt similar strategies and implement them at a faster pace.
Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences.
Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences. For additional discussion on the effect of existing or probable governmental regulations on our business, see “Item 1A.
The Company continues to evaluate potential opportunities to expand the application of our C1-cell protein production platform, and is currently focused on the following markets: ● Recombinant vaccines and drugs for animal and human health ● New innovative biotherapeutics ● Biosimilars / Biobetters non-Glycosylated/Glycosylated protein markets ● Drug formulation, research diagnostic and reagents ● Alternative proteins for food, health and wellness 6 The use of biologic medicines, for applications such as infectious disease vaccines and therapeutics are growing significantly.
The Company continues to evaluate potential opportunities to expand the application of C1, and is currently focused on the following markets: ● Recombinant vaccines and drugs for animal and human health ● New innovative biotherapeutics ● Biosimilars / Biobetters non-Glycosylated/Glycosylated protein markets ● Drug formulation, research diagnostic and reagents The demand for biologic medicines, including infectious disease vaccines and therapeutics, has grown significantly in the post-COVID-19 healthcare landscape.
These partnerships are strategically engaged to leverage the potential of our C1-cell protein production platform in the development of innovative vaccines and drugs, as well as biosimilars and/or biobetters, which we believe will contribute to advancements in medical science and healthcare.
These partnerships are strategically engaged to leverage the potential of C1 in the development of innovative vaccines and drugs, as well as biosimilars and/or biobetters, which we believe will contribute to advancements in medical science and healthcare. The Company believes C1 possesses unique characteristics that distinguish it from conventional filamentous fungal cells.
There is continuous demand for innovation and speed, and as the vaccine and therapeutic markets evolve, there is always the risk that a competitor may be able to develop other compounds or drugs that are able to achieve similar or better results for indications.
The continuous demand for innovation, efficiency, and speed creates opportunities for the advantages of Dyadic’s C1 and Dapibus™ platforms, however, as the Company’s target markets evolve, there is always the risk that a competitor may be able to develop other technologies that are able to achieve similar or better results.
Bio Industrial Products o The Company has developed several enzymes that have the potential for use in multiple industries, such as nutrition, biofuels and biorefining.
Development and optimization are ongoing with results expected by the end of 2025. Bio Industrial Products and Other Products o The Company has developed several enzymes that have the potential for use in multiple industries, such as nutrition, pulp and paper, biogas, biofuels and biorefining.
(2) Other CROs and cGMP Manufacturers The Company works with several other research providers, cGMP manufacturers, and contract research organizations from time to time, which are important to achieve the Company’s scientific and business objectives.
(2) Other CROs and cGMP Manufacturers The Company works with several other research providers, cGMP manufacturers, and contract research organizations from time to time, which are important to achieve the Company’s scientific and business objectives. These entities include but are not limited to 53Biologics (Valladolid, Spain), Fermbox Bio (Bangalore, KA, India), and Eleszto Genetika (Budapest, Hungary).
The Company believes that lack of access and high cost is, in part, the result of the following bottlenecks in the development and manufacture of biologic medicines: ● Extended stable cell line development timelines ● Insufficient titers and overall yields ● Expensive, often royalty stacked, production media in the case of CHO cell lines ● Long production time for stable CHO cell lines ● Previously underfunded development efforts for more efficient next-generation gene expression systems The Company believes that the biopharmaceutical industry can benefit from an innovative protein production platform that is safe, efficient, reliable, and cost effective.
The Company believes that these challenges are, in part, the result of key bottlenecks in the development and manufacturing of biologic medicines, including: ● Extended timelines for stable cell line development and manufacturing ● Insufficient titers and overall yields ● High production costs, due to expensive media and other consumables ● Long production cycles for stable mammalian and insect (i.e., baculovirus) cell lines ● Historically underfunded development of more efficient next-generation protein production systems The Company believes that the biopharmaceutical industry would benefit from an innovative protein production platform that is safe, efficient, reliable, and cost-effective.
However, they produce toxic and pyrogenic cell wall components that may make them less suitable to produce biopharmaceuticals or food components.
However, bacterial platforms produce toxic and pyrogenic cell wall components that may make them less suitable for the production of biopharmaceuticals or other alternative proteins.
C1 has some inherent benefits and potential competitive advantages compared to CHO cells, E. coli , Pichia, and Insect Cells (i.e., Baculovirus) as discussed below: • Mammalian cells: Currently the preferred production host for most complex protein therapeutics due mainly to their ability to produce proteins with human-like glycosylation. This market is dominated by CHO cells.
The Company believes that C1 and Dapibus™, have significant potential to become an alternative to several traditional production technologies currently used in pharmaceutical and non-pharmaceutical applications to produce antigens for use in vaccines, monoclonal antibodies, therapeutic proteins, reagents, food, and nutritional proteins The Company’s platforms have some inherent benefits and potential competitive advantages compared to CHO cells, E. coli , Pichia pastoris , and Insect Cells (i.e., Baculovirus) as discussed below: • Mammalian cells: Currently the preferred production host for most complex protein therapeutics due mainly to their ability to produce proteins with human-like glycosylation and regulatory acceptance.
(3) Non-pharmaceutical Programs Dyadic’s newly developed Dapibus™ filamentous fungal based microbial protein production platform is reengineered to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.
(2) Non-pharmaceutical Programs Dapibus™ was developed to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness. We believe the Company’s industrial heritage provides our partners with the ability to move from demonstration to commercial production quickly and efficiently.
Non-animal Dairy Products o In September 2023, the Company entered into a development and exclusive license agreement to commercialize certain non-animal dairy enzymes used in the production of food products using Dapibus™ and received an upfront payment of $0.6 million in October 2023.
This milestone is in addition to the upfront payment of $600,000 received in 2023 when the Company entered a development and exclusive license agreement to commercialize certain non-animal dairy enzymes used in the production of food products using Dapibus™. o In late 2024, the Company developed an improved highly productive strain of recombinant bovine alpha-lactalbumin, a whey protein for the non-animal dairy industry.
Baculovirus expression systems are used for producing recombinant protein, especially for vaccine antigens. Disadvantages include the comparably lower protein yields than C1 and the need for an added viral inactivation step.
Baculovirus expression systems are used for producing recombinant protein, especially for vaccine antigens. Disadvantages include lower protein titers when compared to other platforms and the need for an additional viral inactivation step. • Trichoderma: One of the leading filamentous fungal platforms for bioindustrial and food protein production.
Dyadic is expected to receive an equity stake in Rabian, fully funded research and development costs, and specified product milestones and royalties upon commercialization. 8 On February 21, 2024, the Company announced it has advanced its collaboration with the Israel Institute for Biological Research (IIBR) and its commercial arm Life Science Research Israel (LSRI), to target emerging disease solutions.
The C1 host cell kit is commercially available through Cygnus Technologies (C1 HCP ELISA Kit). On February 21, 2024, the Company announced it has advanced its collaboration with the Israel Institute for Biological Research (IIBR) and its commercial arm Life Science Research Israel (LSRI), to target emerging disease solutions.
This technology is based on the Thermothelomyces heterothallica (formerly known as Myceliophthora thermophila ) fungus, which the Company named C1. On December 31, 2015, the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE: DD) (the “DuPont Transaction”).
This technology is based on the Thermothelomyces heterothallica (formerly known as Myceliophthora thermophila ) fungus, which the Company named C1.
The Patent will cover claims for the development and manufacture of seasonal and pandemic influenza vaccines from the Company’s C1 protein production platform. Government Regulation and Product Approval As a small biotechnology company that operates in the United States, we are subject to extensive regulation.
Government Regulation and Product Approval As a small biotech company that operates in the United States, we are subject to extensive regulation.
A non-human primate challenge study completed dosing of a C1 produced COVID-19 monoclonal antibody that had previously demonstrated broad neutralization and protection against Omicron (BA.1 and BA.2) and the other earlier variants of concern in hamsters. Preliminary results obtained from the challenge study with the SARS-CoV-2 Delta virus on non-human primates demonstrated potential high protection.
The study included preclinical trials in non-human primates and hamsters, demonstrating broad neutralization and protection against Omicron (BA.1, BA.2) and earlier COVID-19 variants. A non-human primate challenge study with the SARS-CoV-2 Delta variant showed promising protection, marking the first validation of a C1-produced monoclonal antibody's safety and efficacy in primates for infectious diseases..
Since then, the Company has expanded the Phibro/Abic Agreement to include additional research projects to develop vaccines and treatments for companion and livestock animal diseases.
On March 15, 2024, the Company expanded its collaboration with Phibro/Abic to develop vaccines and treatments for livestock animal diseases.
Our Technology Our mission is to leverage our proprietary highly productive, and scalable microbial fungal protein production platforms to meet the growing demand for proteins in both human and animal health markets worldwide.
Dyadic Protein Production Technology The Company is focused on utilizing its proprietary, highly productive, and scalable microbial fungal protein production platforms C1 and Dapibus™ to address the increasing global demand for non-animal-derived proteins in both pharmaceutical and non-pharmaceutical applications.
Additionally, we aim to enable the rapid development and large-scale manufacturing of cost-effective proteins, metabolites, and other biologic products, extending beyond pharmaceutical applications in areas such as food, nutrition, and wellness.
Dapibus™ holds similar promise for cost-effective production of traditionally costly recombinant and animal derived proteins and enzymes such as serum albumin and dairy proteins. Dapibus™ is designed to enable the rapid development and large-scale manufacture of cost-effective enzymes, proteins, metabolites, and other biologic products for non-pharmaceutical applications, including food, nutrition, and wellness.
There are currently one (1) patent and five (5) pending patent applications in the United States, one patent in South Africa, and eighteen (18) additional patent applications in a variety of jurisdictions including Europe and China.
Currently, Dyadic owns or has exclusive rights to seven (7) patent families, all of which have entered the national phase. There are currently two (2) patents and six (6) pending patent applications in the United States, one patent in South Africa, and twenty-nine (29) additional patent applications in a variety of jurisdictions including Europe and China.
We believe that the rapid advances being made in genomics and synthetic biology, make the C1 fungal cell line a promising candidate to further engineer glycosylation pathways: (i) to produce therapeutic proteins having human-like glycoforms structures such as G0, G2, G0F, and G2F; (ii) to reduce or eliminate O-glycosylation; and (iii) to create potentially improved immunogenicity in the case of vaccines.
Advances in genomics and synthetic biology support the engineering of C1’s glycosylation pathways to: (i) produce therapeutic proteins with human-like glycoforms (G0, G2, G0F, G2F), (ii) reduce or eliminate O-glycosylation, and (iii) enhance immunogenicity in vaccine applications. Glycoengineering efforts at VTT are progressing, with early results demonstrating the potential of C1 as a viable platform for glycoprotein production.
Such a platform could facilitate the rapid and high titer production of difficult to express proteins resulting in greater patient access and more affordable biopharmaceuticals.
Such a platform could enable the rapid and high-titer production of difficult-to-express proteins, improving patient access and reducing costs. The Company’s C1 platform has the potential to serve as an alternative to CHO, insect cells (i.e.
On November 29, 2023, the Company announced the top-line safety results, indicating that the study had met its primary endpoint that both the low and high dose levels of the vaccine are safe and well tolerated among participants.
The study met its primary endpoint demonstrating both the low and high dose levels of the vaccine are safe and well tolerated among participants. Additionally, the vaccine induced immune responses at both dose levels, suggesting its potential efficacy in generating protective immunity against the target virus.
After the DuPont Transaction, the Company has been focused on building innovative microbial protein production platforms to address the growing demand for global protein bioproduction utilizing its advanced microbial platforms to develop and manufacture prophylactic, therapeutic, and nutritional biopharmaceutical products for human and animal health and wellness.
For the past nine years since the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE: DD) (the “DuPont Transaction”), the Company has been focused on building innovative microbial protein production platforms to address the growing demand for global protein bioproduction and unmet clinical needs for effective, affordable, and accessible biopharmaceutical products for human and animal health and for other biologic products for use in non-pharmaceutical applications.
We are actively applying our proprietary Dapibus™ platform and other technologies to address the unmet need to reduce the production cost in the global market for non-pharmaceutical recombinant proteins. 9 Cell Culture Media Products o Recombinant Serum Albumin: In March 2024, the Company executed a term sheet with a global albumin manufacturer and distributor to develop and license Dyadic’s recombinant serum albumin initially for diagnostic and research-grade purposes.
The Company is actively utilizing Dapibus™ and other technologies to address the unmet need to reduce the production cost in the global market for non-pharmaceutical recombinant proteins.
The Company has completed the initial analysis of its recombinant albumin products and has Certificates of Analysis for recombinant human and bovine albumin that demonstrate comparability to reference standards used in the testing. o In March 2024, the Company entered into a co-promotion agreement with Biftek Co. for the promotion of growth media supplement for cell culture. o The Company has commenced a development program to produce recombinant transferrin for use in cell culture media for the alternative protein industry, and initial production via our microbial platform was successful. o The Company is currently providing samples of recombinant bovine serum albumin for application testing as growth media for the cultured meat industry.
Dyadic's recombinant transferrin is an animal-free alternative to serum-derived transferrin for use in cell culture media, diagnostic, research, and biopharmaceutical applications. The Company has completed the initial analysis of its recombinant transferrin product and has Certificates of Analysis for recombinant bovine transferrin that demonstrate comparability to reference standards used in the testing.
The C1-cell protein production platform is a versatile thermophilic filamentous fungal expression system customized for the development and production of biologic products including enzymes and other proteins for human and animal health.
Through targeting key products within its core business segments, the Company seeks to address global health and nutrition challenges by providing innovative, accessible, and economically viable solutions. 7 C1 is a versatile thermophilic filamentous fungal expression system customized for the development and production of biologic products including enzymes and other proteins for human and animal health that may offer potential competitive advantages compared to certain other legacy biopharmaceutical expression systems in the discovery, development, and cost-effective manufacturing of biologic medicines and vaccines.
Glycosylated Therapeutic Programs and Potential Nivolumab Commercialization Program The Company’s longer-term objective, which will require substantially more time and capital, is to apply the C1-cell protein production platform for the large therapeutic glycoprotein market.
Glycosylated Therapeutic Programs: The Company aims to leverage its C1 platform for the large therapeutic glycoprotein market, requiring further investment in time and capital.
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The Company also developed the Dapibus™ thermophilic filamentous fungal-based microbial protein production platform to enable the rapid development and large-scale manufacture of cost-effective proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, including food, nutrition, and wellness. We believe that our microbial cell line possesses distinctive characteristics compared to conventional filamentous fungal cells.
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After the DuPont Transaction, the Company has directed its efforts toward advancing the C1 platform to address the increasing global demand for the development and manufacturing of prophylactic and therapeutic biopharmaceuticals for human and animal health.
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Moreover, we believe that our protein production platforms offer potential competitive advantages in the discovery, development, and manufacturing of biologic medicines and vaccines, compared to certain other legacy biopharmaceutical expression systems, which include but are not limited to: Purity High retention of target secreted protein through downstream processing No requirement for viral (i.e., CHO and Baculovirus) or endotoxin (i.e., E. coli ) removal High Productivity Robust and versatile growth conditions High yields of secreted protein Low viscosity due to C1’s unique morphology Robustness Proven at both small and large scale, ranging from laboratory microtiter plates, shaker flasks, single use and/or stainless-steel microbial fermenters Stable and correctly folded monoclonal antibodies (mAbs), having binding, neutralizing and certain other properties similar to CHO produced mAbs 5 Speeds Develop stable C1-cell lines for protein production in ~ 60 days Production time savings of ~30 days over CHO-cell production (C1: 12-14 days vs.
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The Company’s biopharmaceutical development efforts have been centered on enhancing the capability of the C1 platform to produce stable, properly folded, and functional proteins for pharmaceutical applications, including vaccines and monoclonal antibodies.
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CHO 41-54 days) Manufacturing ~ 3-4 batches of C1 produced mAbs in the same time it takes to make 1 batch using CHO-cells Faster product release –No requirement for viral (i.e., CHO and Baculovirus) or endotoxin (i.e., E. coli) removal allowing for earlier product release Costs High yields and rapid manufacturing cycle times reduce costs and shrink manufacturing footprint C1-cells can be grown using low-cost and readily available cGMP media; C1 media No requirement for viral or endotoxin removal, which simplifies processing compared to CHO, Baculovirus and E. coli, saving time and money Competition The biotechnology and biopharmaceutical industry is intensely competitive.
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In addition to improving the quality and productivity of the C1 platform, the Company has sought to validate its platform for human use through a series of fully funded biopharmaceutical projects, extensive animal studies utilizing C1-produced proteins, and in 2024, the successful completion of a Phase 1 first-in-human study for a vaccine antigen produced using C1, which demonstrated its safety for human applications.
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Potential competition includes major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of these competitors have substantially greater financial, technical, and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations with established sales forces.
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Recognizing the longer development timelines, clinical testing, and regulatory requirements associated with human and animal pharmaceutical products, the Company has refined its core business strategy to expand into recombinant (non-animal derived) alternative proteins for non-pharmaceutical applications in research, nutrition, and industrial markets.
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Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Currently, we are not aware of other companies pursuing a business model similar to what we are developing under our microbial filamentous fungal-based protein production platform.
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To address these opportunities, the Company has developed and launched the Dapibus™ Protein Production Platform (“Dapibus™”), which supports various applications within the alternative proteins field, namely in Life Sciences, Food & Nutrition, and Bioindustrial applications.
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We believe that our microbial fungal based protein production platforms, including C1 and Dapibus™, have significant potential to become an alternative to several traditional production technologies currently used in the biopharmaceutical industry to produce vaccines, monoclonal antibodies, and other therapeutic proteins for both the human and animal health markets.
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Given the reduced developmental costs, shorter timelines, and fewer regulatory requirements associated with alternative proteins, Dapibus™ has enabled the Company to generate near-term recurring revenue while continuing to build long-term value through C1 for pharmaceutical applications. The Company anticipates achieving commercialization of certain alternative protein products in 2025 through a combination of existing collaborations and internal manufacturing efforts.
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We believe that our microbial protein production platforms hold the potential to become leading protein production platforms for developing and manufacturing proteins across various sectors, including biopharmaceuticals, food, nutrition, wellness, drug formulation, and research diagnostics, based on our platform's capability to expedite development processes, achieve high protein yields, scale efficiently, utilize low-cost media, and ultimately reduce production costs.
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By applying its industrially validated, efficient, and cost-effective bioproduction technology to high-value markets such as human therapeutics and alternative food and nutrition, the Company aims to facilitate the rapid development and large-scale manufacturing of proteins, enzymes, and other biologic products.
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However, biologic medicines are in many cases limited and expensive for both patients and health care systems.
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C1 offers potential competitive advantages in the discovery, development, and manufacturing of biologic medicines and vaccines compared to certain legacy biopharmaceutical expression systems. It allows for streamlined purification processes, retaining target secreted proteins efficiently through downstream processing without the need for viral (e.g., CHO (Chinese Hamster Ovary) and Baculovirus) or endotoxin (e.g., E. coli) removal.
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We believe that our C1-cell protein production platform has the potential to be an alternative to CHO, Baculovirus and other traditional expression systems to produce proteins for vaccines, therapeutics, diagnostics, alternative foods, nutrition and wellness and other biological products.
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The platform also demonstrates high productivity, thriving under robust and versatile growth conditions while yielding large amounts of secreted protein with low viscosity due to C1’s unique morphology. Its robustness has been proven across scales, from laboratory microtiter plates and shaker flasks to single-use and stainless-steel microbial fermenters, producing stable, correctly folded mAbs with properties comparable to CHO-produced mAbs.
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These entities include but are not limited to CR2O, a contract research organization, to manage and support further preclinical and clinical development of DYAI-100, and Eleszto Genetika (Budapest, Hungary).
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This platform enables streamlined purification processes, ensuring strong retention of the target secreted protein through downstream processing, with no requirement for endotoxin (e.g., E. coli) removal. It also boasts high productivity, supporting robust and versatile growth conditions that yield large amounts of secreted protein, while its unique morphology maintains low viscosity at large scales.
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The Company, supplemented by third party funding is also further developing its Dapibus™ protein production platform for use in non-pharmaceutical applications, such as food, nutrition, and wellness.
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Additionally, Dapibus™ demonstrates exceptional robustness, with proven scalability from laboratory microtiter plates and shaker flasks to single-use and industrial-scale stainless-steel microbial bioreactors. Furthermore, it enables the production of glycosylated proteins, expanding its versatility for various biologic applications.
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Our Research and Development ( “ R&D ” ) Programs (1) Internal Research Programs C1 Production Host Improvement Programs The Company has research and development agreements with VTT, Eleszto Genetika (Budapest, Hungary), other CROs and service and technical providers to further improve its C1-cell protein production platform to become an even more robust, versatile, and efficient therapeutic protein production platform.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors that may result in fluctuations in our stock price include, but are not limited to, the following: • Changes in the public’s perception of the prospects of biotechnology companies; • Sales of our common stock in the public market by such stockholders or other significant stockholders, executive officers, or directors; • Announcements of new technological innovations, patents or new products or processes by us, Danisco or our current or future collaborators, licensees and competitors; • Announcements by us, Danisco or our collaborators and licensees relating to our relationships with third parties; • Coverage of, or changes in financial estimates by us or securities and industry analysts; • Conditions or trends in the biotechnology industry; • Changes in investor interest in the areas in which we and/or our collaborators and licensees are applying our technologies, such as COVID-19; • Changes in the market valuations of other biotechnology companies; • Limitations or expanded uses in the areas within the biopharmaceutical or other industries into which we can apply our technologies and products; • Actual or anticipated changes in our growth rate relative to our competitors; • Developments in domestic and international governmental policy or regulations; • Announcements by us, Danisco, our current and future collaborators and licensees, or our competitors of significant acquisitions, divestures, strategic partnerships, license agreements, joint ventures or capital commitments; • The position of our cash, cash equivalents and marketable securities; • Any changes in our debt position; • Developments in patent or other proprietary rights held by us, Danisco or by others; • Negative effects related to the stock or business performance of Danisco, our current and future collaborators and licensees, or the abandonment of projects using our technology by our collaborators and/or licensees; • Scientific risks inherent to emerging technologies such as t he C1-cell protein production platform or our other technologies; • Set-backs, and/or failures, and or delays in our or our current and future collaborators’ and licensees’ R&D and commercialization programs; • Delays or failure to receive regulatory approvals by us, Danisco and/or our current and future collaborators and licensees; • Loss or expiration of our or Danisco’s intellectual property rights; • Theft, misappropriation or expiration of owned or licensed proprietary and intellectual property, genetic and biological material owned by us and/or Danisco US, Inc., and VTT Technical Research Centre of Finland Ltd; • Lawsuits initiated by or against us, Danisco, or our current and future collaborators and licensees; • Period-to-period fluctuations in our operating results; • Future royalties from product sales, if any, by Danisco, our current or future strategic partners, collaborators or licensees; • Future royalties may be owed to Danisco by us, our collaborators, licenses, or sub-licensees under certain circumstances related to our Danisco Pharma License; • Short positions taken in our common stock; • Sales of our common stock or other securities in the open market; • Stock buy-back programs; • Stock splits; and • Decisions made by the board related to potential registration of Dyadic’s stock under the Securities Act of 1933, as amended (the “Securities Act”), and/or up listing to another stock exchange.
Biggest changeFactors that may result in fluctuations in our stock price include, but are not limited to, the following: • Changes in the public’s perception of the prospects of biotechnology companies; • Sales of our common stock in the public market by such stockholders or other significant stockholders, executive officers, or directors; • Announcements of new technological innovations, patents or new products or processes by us, Danisco or our current or future collaborators, licensees and competitors; • Announcements by us, Danisco or our collaborators and licensees relating to our relationships with third parties; • Coverage of, or changes in financial estimates by us or securities and industry analysts; • Conditions or trends in the biotechnology industry; • Changes in investor interest in the areas in which we and/or our collaborators and licensees are applying our technologies, such as COVID-19; • Changes in the market valuations of other biotechnology companies; • Limitations or expanded uses in the areas within the biopharmaceutical or other industries into which we can apply our technologies and products; • Actual or anticipated changes in our growth rate relative to our competitors; • Developments in domestic and international governmental policy or regulations; • Announcements by us, Danisco, our current and future collaborators and licensees, or our competitors of significant acquisitions, divestures, strategic partnerships, license agreements, joint ventures or capital commitments; • The position of our cash, cash equivalents and marketable securities; • Any changes in our debt position; • Developments in patent or other proprietary rights held by us, Danisco or by others; • Negative effects related to the stock or business performance of Danisco, our current and future collaborators and licensees, or the abandonment of projects using our technology by our collaborators and/or licensees; • Scientific risks inherent to emerging technologies such as the C1 platform or our other technologies; • Set-backs, and/or failures, and or delays in our or our current and future collaborators’ and licensees’ R&D and commercialization programs; • Delays or failure to receive regulatory approvals by us, Danisco and/or our current and future collaborators and licensees; • Loss or expiration of our or Danisco’s intellectual property rights; • Theft, misappropriation or expiration of owned or licensed proprietary and intellectual property, genetic and biological material owned by us and/or Danisco US, Inc., and VTT Technical Research Centre of Finland Ltd; • Lawsuits initiated by or against us, Danisco, or our current and future collaborators and licensees; • Period-to-period fluctuations in our operating results; • Future royalties from product sales, if any, by Danisco, our current or future strategic partners, collaborators or licensees; • Future royalties may be owed to Danisco by us, our collaborators, licenses, or sub-licensees under certain circumstances related to our Danisco Pharma License; • Short positions taken in our common stock; • Sales of our common stock or other securities in the open market; • Stock buy-back programs; • Stock splits; and • Decisions made by the board related to potential registration of Dyadic’s stock under the Securities Act of 1933, as amended (the “Securities Act”), and/or up listing to another stock exchange. 31 If we were to become party to a securities class action suit, we could incur substantial legal fees and our management’s attention and resources could be diverted from operating our business to responding to litigation.
Our future capital requirements may be substantial, particularly as we continue to further develop, engineer and optimize our microbial protein production platforms and other proprietary technologies, products and processes for licensing for research and development, and commercialization of potential animal and human pharmaceutical products.
Our future capital requirements may be substantial, particularly as we continue to further develop, engineer and optimize our microbial protein production platforms and other proprietary technologies, products and processes for licensing for research and development, and commercialization of potential animal and human pharmaceutical and other products.
Moreover, disagreements with Danisco, our current and/or future CROs, other service providers, collaborators or licensees could develop over rights to our intellectual property, over further licensing of our technologies to other parties in certain pharmaceutical fields, or for other reasons.
Moreover, disagreements with Danisco, our current and/or future CROs, other service providers, collaborators or licensees could develop over rights to our intellectual property, over further licensing of our technologies to other parties in certain pharmaceutical and other fields, or for other reasons.
Some of the factors that could impact our operating results include: • Expiration of or cancellations of our research contracts with current and future collaborators and/or licensees, which may not be renewed or replaced; • Setbacks or failures in our and our current and future collaborators’ and licensees’ research, development and commercialization efforts; • Setbacks, or delays in our research and development efforts to develop and produce biologics; • Setbacks, or delays in our research and development efforts to re-engineer the C1-cell protein production platform or our other technologies for their applications and use in developing and producing biologics; • The speed, and success rate of our discovery and research and development efforts leading to potential licenses, or other forms of collaborations, access fees, milestones and royalties; • The timing and willingness of current and future collaborators and licensees to utilize C1 to develop and commercialize their products which would result in potential upfront fees, milestones and royalties; • General and industry specific economic conditions, which may affect our current and future collaborators’ and licensees’ R&D expenditures; • The adoption and acceptance of the C1-cell protein production platform and our other technologies by biopharmaceutical and non-pharmaceutical companies and regulatory agencies; • The addition or loss of one or more of the collaborative partners, grants, research funding, or licensees we are working with to further develop and commercialize our technologies and products in the pharmaceutical industry; • Our ability to file, maintain and defend our intellectual property and to protect our proprietary information and trade secrets; • Our ability to develop technology, products and processes that do not infringe on the intellectual property of third parties; • The improvement and advances made by our competitors to CHO, E.coli , yeast, inset cells, plant and other expression systems; • The introduction by our competitors of new discovery and expression technologies competitive with the C1-cell protein production platform; • Our ability to enter into new research projects, grants, licenses or other forms of collaborations and generate revenue from such parties; • Scientific risk associated with emerging technologies such as the C1-cell protein production platform; • Failure to bring on the necessary research and manufacturing capacity, e.g., CRO, CMO (contract manufacturing organization), and CDMO (contract development and manufacturing organization), if required; • Uncertainty regarding the timing of research funding, grants or upfront license fees for new C1-cell protein production platform, our other technologies, collaborations, license agreements or expanded license agreements; and • Delays or failure to receive upfront fees, milestones and royalties and other payments.
Some of the factors that could impact our operating results include: • Expiration of or cancellations of our research contracts with current and future collaborators and/or licensees, which may not be renewed or replaced; • Setbacks or failures in our and our current and future collaborators’ and licensees’ research, development and commercialization efforts; • Setbacks, or delays in our research and development efforts to develop and produce biologics; • Setbacks, or delays in our research and development efforts to re-engineer the C1 platform or our other technologies for their applications and use in developing and producing biologics; • The speed, and success rate of our discovery and research and development efforts leading to potential licenses, or other forms of collaborations, access fees, milestones and royalties; • The timing and willingness of current and future collaborators and licensees to utilize C1 to develop and commercialize their products which would result in potential upfront fees, milestones and royalties; • General and industry specific economic conditions, which may affect our current and future collaborators’ and licensees’ R&D expenditures; • The adoption and acceptance of the C1 platform and our other technologies by biopharmaceutical and non-pharmaceutical companies and regulatory agencies; • The addition or loss of one or more of the collaborative partners, grants, research funding, or licensees we are working with to further develop and commercialize our technologies and products in the pharmaceutical industry; • Our ability to file, maintain and defend our intellectual property and to protect our proprietary information and trade secrets; • Our ability to develop technology, products and processes that do not infringe on the intellectual property of third parties; • The improvement and advances made by our competitors to CHO, E.coli , yeast, inset cells, plant and other expression systems; • The introduction by our competitors of new discovery and expression technologies competitive with the C1 platform; • Our ability to enter into new research projects, grants, licenses or other forms of collaborations and generate revenue from such parties; • Scientific risk associated with emerging technologies such as the C1 platform; • Failure to bring on the necessary research and manufacturing capacity, e.g., CRO, CMO (contract manufacturing organization), and CDMO (contract development and manufacturing organization), if required; • Uncertainty regarding the timing of research funding, grants or upfront license fees for new C1 platform, our other technologies, collaborations, license agreements or expanded license agreements; and • Delays or failure to receive upfront fees, milestones and royalties and other payments.
If we fail to develop similar, new and better performing technologies, products and processes at significantly lower manufacturing costs, make fermentation yield improvements on our existing production processes, generate the necessary safety and regulatory data or gain registration and market acceptance of the C1-cell and Dapibus TM protein production platforms, or our other technologies, products or processes, we could fail to recoup our R&D investments and fail to capitalize on potential opportunities or gain market share from our competitors.
If we fail to develop similar, new and better performing technologies, products and processes at significantly lower manufacturing costs, make fermentation yield improvements on our existing production processes, generate the necessary safety and regulatory data or gain registration and market acceptance of the C1-cell and Dapibus™ protein production platforms, or our other technologies, products or processes, we could fail to recoup our R&D investments and fail to capitalize on potential opportunities or gain market share from our competitors.
Conducting business internationally exposes us to a variety of risks, including: • changes in or interpretations of foreign regulations that may adversely affect our ability to sell our products, repatriate profits to the United States or operate our foreign-located facilities; • the imposition of tariffs; • the imposition of limitations on, or increase of, withholding and other taxes on remittances and other payments by foreign subsidiaries or joint ventures; • uncertainties relating to foreign laws, regulations and legal proceedings including tax, import/export, anti-corruption and exchange control laws; • the availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; • increased demands on our limited resources created by our operations may constrain the capabilities of our administrative and operational resources and restrict our ability to attract, train, manage and retain qualified management, technicians, scientists and other personnel; • economic or political instability in foreign countries; • difficulties associated with staffing and managing foreign operations; and • the need to comply with a variety of United States and foreign laws applicable to the conduct of international business, including import and export control laws and anti-corruption laws.
Conducting business internationally exposes us to a variety of risks, including: ● Changes in or interpretations of foreign regulations that may adversely affect our ability to sell our products, repatriate profits to the United States or operate our foreign-located facilities; ● The imposition of tariffs; ● The imposition of limitations on, or increase of, withholding and other taxes on remittances and other payments by our foreign subsidiary or joint ventures; ● Uncertainties relating to foreign laws, regulations and legal proceedings including tax, import/export, anti-corruption and exchange control laws; ● The availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; ● Increased demands on our limited resources created by our operations may constrain the capabilities of our administrative and operational resources and restrict our ability to attract, train, manage and retain qualified management, technicians, scientists and other personnel; ● Economic or political instability in foreign countries; ● Difficulties associated with staffing and managing foreign operations; and ● The need to comply with a variety of United States and foreign laws applicable to the conduct of international business, including import and export control laws and anti-corruption laws.
Additionally, any such developments may have a negative impact on our contract manufacturers, which could harm our business. 19 Increasing scrutiny and changing expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Additionally, any such developments may have a negative impact on our contract manufacturers, which could harm our business. Increasing scrutiny and changing expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Products derived from GMOs may in some instances be subject to bans or additional regulation by federal, state, local and foreign government agencies. These agencies may not allow us or our collaborators and licensees to produce and market products derived from GMOs in a timely manner or under technically or commercially feasible conditions.
Products derived from GMOs may in some instances be subject to bans or additional or changing regulation by federal, state, local and foreign government agencies. These agencies may not allow us or our collaborators and licensees to produce and market products derived from GMOs in a timely manner or under technically or commercially feasible conditions.
Any of these developments could harm our technology development and value, product development efforts, revenue, profits and overall business. 18 We rely on our collaborators and other third parties to deliver timely and accurate information in order to accurately report our financial results as required by law.
Any of these developments could harm our technology development and value, product development efforts, revenue, profits and overall business. We rely on our collaborators and other third parties to deliver timely and accurate information in order to accurately report our financial results as required by law.
If we do not pay dividends, our stock may be less valuable because a return on investment will only occur if and to the extent that our stock price appreciates. Our anti-takeover defense provisions may deter potential acquirers and depress our stock price.
If we do not pay dividends, our stock may be less valuable because a return on investment will only occur if and to the extent that our stock price appreciates. 32 Our anti-takeover defense provisions may deter potential acquirers and depress our stock price.
These disruptions could increase our operational expense as well as impact the management of our business operations, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity. 17 Risks Related to Dependence on Third Parties We are dependent on collaborations with third parties, and if we fail to maintain or successfully manage existing, or enter into new, strategic collaborations, we may not be able to develop and commercialize many of our technologies and products and achieve profitability.
These disruptions could increase our operational expense as well as impact the management of our business operations, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity. 24 Risks Related to Dependence on Third Parties We are dependent on collaborations with third parties, and if we fail to maintain or successfully manage existing, or enter into new, strategic collaborations, we may not be able to develop and commercialize many of our technologies and products and achieve profitability.
The amount of our future net losses will depend, in part, on the rate of increase in our expenses along with other potential cost of unforeseen circumstances, our ability to generate research funding, government grants, receipt of access fees, milestones, royalty and other payments, and whether we are able to generate revenues by entering into license agreements or other forms of collaborations, launch new products and/or processes from future licensees or collaborators, and our ability to raise additional capital.
The amount of our future net losses will depend, in part, on the rate of increase in our expenses along with other potential costs of unforeseen circumstances, our ability to generate research funding, government grants, receipt of access fees, milestones, royalty and other payments, and whether we are able to generate revenues by entering into license agreements or other forms of collaborations, launch new products and/or processes from future licensees or collaborators, and our ability to raise additional capital.
System failures, accidents, or security breaches could cause interruptions in our operations and could result in a material disruption of our research activities and business operations, in addition to possibly requiring substantial expenditures of resources to remedy.
Resulting system failures, accidents, or security breaches could cause interruptions in our operations and could result in a material disruption of our research activities and business operations, in addition to possibly requiring substantial expenditures of resources to remedy.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. 21 Risks Related to Our Common Stock The price of our shares of common stock is likely to be volatile, and you could lose all or part of your investment.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. 30 Risks Related to Our Common Stock The price of our shares of common stock is likely to be volatile, and you could lose all or part of your investment.
Moreover, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders, and, accordingly, they could cause us to enter into transactions or agreements, which we would not otherwise consider. Future issuances of shares of our common stock may negatively affect our stock price.
Moreover, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders, and, accordingly, they could cause us to enter into transactions or agreements, which we would not otherwise consider. Future resales of shares of our common stock may negatively affect our stock price.
Inability to obtain sufficient insurance coverage at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products developed by us, or our collaborators and licensees. 16 Foreign currency fluctuations could adversely affect our results.
Inability to obtain sufficient insurance coverage at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products developed by us, or our collaborators and licensees. 22 Foreign currency fluctuations could adversely affect our results.
The results of nonclinical studies and early-stage clinical trials may not be predictive of future results. The results of nonclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials.
The results of nonclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials.
Conflicts with the CROs, other service providers, collaborators and/or licensees could harm our business. An important part of our strategy includes involvement in proprietary research programs. We may pursue opportunities in the pharmaceutical field that could conflict with those of our collaborators and licensees.
Conflicts with the CROs, other service providers, collaborators and/or licensees could harm our business. An important part of our strategy includes involvement in proprietary research programs. We may pursue opportunities in the pharmaceutical and other fields that could conflict with those of our collaborators and licensees.
Others have filed, and in the future are likely to file, patent applications covering genes or gene fragments, genetic elements, screening, gene expression and fermentation processes and other intellectual property that we may wish to utilize with the C1-cell protein production platform or our other technologies or products and systems that are similar to those developed with its use.
Others have filed, and in the future are likely to file, patent applications covering genes or gene fragments, genetic elements, screening, gene expression and fermentation processes and other intellectual property that we may wish to utilize with the C1 platform or our other technologies or products and systems that are similar to those developed with its use.
We heavily rely on contracts with third-party contract research organizations ( “ CROs ” ) and other third-party service providers to conduct our research and development, pre-clinical, CMC and cGMP manufacturing, fill and finish, and potential clinical trials, which may not be available to the Company on commercially reasonable terms or at all.
We heavily rely on contracts with third-party CROs and other third-party service providers to conduct our research and development, pre-clinical, CMC and cGMP manufacturing, fill and finish, and potential clinical trials, which may not be available to the Company on commercially reasonable terms or at all.
An unfavorable regulatory ruling could be difficult to resolve and could delay or possibly prevent a product from being commercialized, or even delay or prevent the use of the C1- cell protein production platform or our other technologies to produce future products, which would have a material adverse effect on our growth and prospects.
An unfavorable regulatory ruling could be difficult to resolve and could delay or possibly prevent a product from being commercialized, or even delay or prevent the use of the C1 platform or our other technologies to produce future products, which would have a material adverse effect on our growth and prospects.
Our biopharmaceutical business should be evaluated as having the same risks as those inherent to early-stage biotechnology companies because the application of the C1-cell protein production platform for the expression of pre-clinical and clinical quantities of therapeutic proteins, antibodies and vaccines is still in early development.
Our biopharmaceutical business should be evaluated as having the same risks as those inherent to early-stage biotechnology companies because the application of the C1 platform for the expression of pre-clinical and clinical quantities of therapeutic proteins, antibodies and vaccines is still in early development.
Neither we nor any collaborator or licensee has yet submitted any application with the FDA or any other regulatory authority for any product candidate generated through the use of the C1- cell protein production platform as it relates to the development and manufacture of pharmaceutical products.
Neither we nor any collaborator or licensee has yet submitted any application with the FDA or any other regulatory authority for any product candidate generated through the use of the C1 platform as it relates to the development and manufacture of pharmaceutical and other products.
The C1- cell protein production platform and our other technologies may be subject to lengthy regulatory reviews and unfavorable regulatory determinations if they raise safety questions which cannot be satisfactorily answered or if results from studies do not meet regulatory requirements.
The C1 platform and our other technologies may be subject to lengthy regulatory reviews and unfavorable regulatory determinations if they raise safety questions which cannot be satisfactorily answered or if results from studies do not meet regulatory requirements.
Additionally, future products produced by us or our current and future collaborators or licensees using the C1- cell protein production platform, or our other technologies may not be approved by the FDA or other regulatory agencies in the U.S. or worldwide.
Additionally, future products produced by us or our current and future collaborators or licensees using the C1 platform, or our other technologies may not be approved by the FDA or other regulatory agencies in the U.S. or worldwide.
Our quarterly and annual operating results have fluctuated in the past and are likely to do so in the future. These fluctuations could cause our stock price to vary significantly or decline.
Our quarterly and annual operating results may be volatile. Our quarterly and annual operating results have fluctuated in the past and are likely to do so in the future. These fluctuations could cause our stock price to vary significantly or decline.
Competition for experienced personnel from numerous companies, academic institutions and other research facilities may limit our ability to attract and retain qualified management, directors, consultants, and scientific personnel on acceptable terms. Failure to attract and retain qualified personnel would inhibit our ability to maintain and pursue collaborations and develop our products and core technologies. Personnel changes may disrupt our operations.
As such, competition for experienced personnel from numerous companies, academic institutions and other research facilities may limit our ability to attract and retain qualified management, directors, consultants, and scientific personnel on acceptable terms. Failure to attract and retain qualified personnel would inhibit our ability to maintain and pursue collaborations and develop our products and core technologies.
There is no assurance that the C1-cell protein production platform or any product expressed from C1, or our other technologies, will perform the same or better, save our customers money relative to existing gene expression technologies or those of our competitors, provide our customers with other benefits, obtain governmental safety and regulatory approvals, be registered or gain market acceptance.
There is no assurance that the C1 platform or any product expressed from C1, or our other technologies, will perform the same or better or save our customers money relative to existing gene expression technologies or those of our competitors, obtain governmental safety and regulatory approvals, be registered or gain market acceptance.
The success of our biopharmaceutical business will depend on our ability to develop, register, and introduce similar, new and improved technologies and products in a timely manner, at significantly lower manufacturing costs that address the evolving requirements of the pharmaceutical industry and potential customers.
The success of our business will depend on our ability to develop, register, and introduce similar, new and improved technologies and products in a timely manner, at significantly lower manufacturing costs that address the evolving requirements of the relevant industries and potential customers.
As of December 31, 2023 , we had an accumulated deficit of approximately $ 80.3 million . Our profitability has strongly relied on, and will be even more reliant going forward on, third party industry and government research funding, licensing partnerships and other forms of collaborations.
As of December 31, 2024, we had an accumulated deficit of approximately $86.1 million. Our profitability has strongly relied on, and will be even more reliant going forward on, third-party industry and government research funding, licensing partnerships and other forms of collaborations.
Concerns about the C1- cell protein production platform and our other technologies, and particularly about the expression of genes from C1 for pharmaceutical purposes, could adversely affect their market acceptance.
Concerns about the C1 platform and our other technologies, and particularly about the expression of genes from C1 for pharmaceutical and non-pharmaceutical purposes, could adversely affect their market acceptance.
Present and future environmental laws and regulations and interpretations thereof, more vigorous enforcement of policies and discovery of currently unknown conditions may require substantial expenditures that could have a material adverse effect on our results of operations and financial position.
Present and future environmental laws and regulations and interpretations thereof, more vigorous enforcement of policies and discovery of currently unknown conditions may impair our research, development or production efforts or require substantial expenditures that could have a material adverse effect on our results of operations and financial position.
Our directors and consultants may be affiliated with or employed by other parties, and some may have consulting or other advisory arrangements with other entities that may conflict or compete with their obligations to us. We may be sued for product liability.
Our directors and consultants may be affiliated with or employed by other parties, and some may have consulting or other advisory arrangements with other entities that may conflict or compete with their obligations to us.
Approximately 35.1% of these outstanding common shares are beneficially owned or controlled by our executive officers, directors and principal stockholders. Our common stock has a relatively small public float.
Approximately 34.7% of these outstanding common shares are beneficially owned or controlled by our executive officers, directors and principal stockholders. 33 Our common stock has a relatively small public float.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of December 31, 2023 , there were 28,811,061 shares of our common stock outstanding.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of December 31, 2024, there were 29,835,799 shares of our common stock outstanding.
If our competitors develop technologies and products more quickly and market more effectively than our product candidates, our commercial opportunity will be reduced or eliminated. The biopharmaceutical industry is characterized by rapid technological change, and the area of gene and protein research and platform development is a rapidly evolving field.
If our competitors develop technologies and products more quickly and market more effectively than our product candidates, our commercial opportunity will be reduced or eliminated. The industries in which we operate are characterized by rapid technological change, and the area of gene and protein research and platform development is a rapidly evolving field.
We cannot predict whether Danisco intends to or will pursue the use of the C1-cell protein production platform to develop or manufacture pharmaceutical products or whether or when we might receive royalties from Danisco.
For instance, we cannot predict whether Danisco intends to or will pursue the use of the C1 platform to develop or manufacture pharmaceutical products or whether or when we might receive royalties from Danisco.
In addition, Dyadic will continue to review its existing and potential patent positions and rights. Based on our analysis if and when the commercial opportunities and patent enforceability are questionable, we may abandon certain patents in some countries. There is a risk that we will abandon potentially valuable patents.
In addition, Dyadic will continue to review its existing and potential patent positions and rights. Based on our analysis if and when the commercial opportunities and patent enforceability are questionable, we may abandon certain patents in some countries.
To the extent that any disruption or security breach was to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and delays in our research efforts and financial reporting compliance, as well as a significant increase in costs to recover or reproduce the data.
To the extent that any disruption or security breach was to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and delays in our research efforts and financial reporting compliance, as well as a significant increase in costs to recover or reproduce the data. 23 Of special note is our risk when implementing new capabilities.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock prices may be more volatile. Item 1B. Unresolved Staff Comments Not applicable.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock prices may be more volatile.
In addition, our expenses could increase if we are required by the FDA or other domestic and foreign regulatory authorities to perform studies or trials in addition to those currently expected, or if there are delays in completing additional safety studies such as toxicology and pathogenicity studies, clinical trials, preclinical studies, animal or human studies or the development of any of our or our collaborators’ product candidates. 12 We have a history of net losses, and we may not achieve or maintain profitability.
In addition, our expenses could increase if we are required by the FDA or other domestic and foreign regulatory authorities to perform studies or trials in addition to those currently expected, or if there are delays in completing additional safety studies such as toxicology and pathogenicity studies, clinical trials, preclinical studies, animal or human studies or the development of any of our or our collaborators’ product candidates.
Additionally, if we were to be unsuccessful in retaining a CRO with the requisite experience and skills we require and were required to build our own research facility, it could take a year or longer before such owned research facility were able to be brought online to carry out the necessary technology and product development efforts of the Company.
This could have a material adverse effect on our business, revenues or operating results. 25 Additionally, if we were to be unsuccessful in retaining a CRO with the requisite experience and skills we require and were required to build our own research facility, it could take a year or longer before such owned research facility were able to be brought online to carry out the necessary technology and product development efforts of the Company.
Of special note is our risk when implementing new capabilities. The implementation of new systems and information technology could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, or causing delays or difficulties in transitioning to new systems.
The implementation of new systems and information technology could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, or causing delays or difficulties in transitioning to new systems.
If we and/or our collaborators are not able to overcome the ethical, legal, and social concerns relating to genetic engineering, some or all of our products and processes may not gain public acceptance, which could have a material adverse effect on our business, financial condition and results of operations.
If we and/or our collaborators are not able to overcome the ethical, legal, and social concerns relating to genetic engineering, some or all of our products and processes may not gain public acceptance, which could have a material adverse effect on our business, financial condition and results of operations. 27 Our results of operations may be adversely affected by environmental, health and safety laws, regulations and liabilities.
Many of the organizations competing with us in the market for such products have more capital resources, larger R&D and marketing staff, facilities and capabilities, and greater experience in research and development, regulatory approval, manufacturing and commercialization of technology and products. Accordingly, our competitors may be able to develop technologies and products more rapidly.
Business—Competition.” Many of these competitors for such products have more capital resources, larger R&D and marketing staff, facilities and capabilities, and greater experience in research and development, regulatory approval, manufacturing and commercialization of technology and products. Accordingly, our competitors may be able to develop technologies and products more rapidly.
These laws, regulations and permits can often require expensive pollution control equipment or operational changes to limit actual or potential impacts to the environment. A violation of these laws and regulations or permit conditions could result in substantial fines, criminal sanctions, permit revocations and/or facility shutdowns.
These laws, regulations and permits can often require expensive pollution control equipment or operational changes to limit actual or potential impacts to the environment. Even then, we cannot eliminate the risk of contamination or injury from these materials. A violation of these laws and regulations or permit conditions could result in substantial fines, criminal sanctions, permit revocations and/or facility shutdowns.
The C1-cell protein production platform could produce vaccines, antibodies, or therapeutic products and enzymes tha t have safety, toxicity, pathogenicity, immunogenicity and other issues associated with them.
The C1 platform could produce vaccines, antibodies, or therapeutic products and enzymes that have safety, toxicity, pathogenicity, immunogenicity and other issues associated with them.
We have no experience submitting applications to the FDA or similar regulatory authorities in the past and could be subject to lengthy and/or unfavorable regulatory proceedings.
We have no experience submitting applications to the FDA or similar regulatory authorities in the past and may not be able to obtain regulatory approval or may be subject to lengthy and/or unfavorable regulatory proceedings.
Other changes in regulatory requirements, laws and policies, or evolving interpretations of existing regulatory requirements, laws and policies, may result in increased compliance costs, delays, capital expenditures and other financial obligations that could adversely affect our business or financial results. Public views on ethical and social issues may limit use of our technologies.
Other changes in regulatory requirements, laws and policies, or evolving interpretations of existing regulatory requirements, laws and policies, may result in increased compliance costs, delays, capital expenditures and other financial obligations that could adversely affect our business or financial results.
Failure to obtain, maintain and expand access to certain third party CROs and other service providers could have a material adverse impact on the Company’s research projects, financial condition and operating results.
The Company may be unable to obtain, maintain or expand its access to third party CROs and other service providers to conduct these services. Failure to obtain, maintain and expand access to certain third party CROs and other service providers could have a material adverse impact on the Company’s research projects, financial condition and operating results.
The sale of additional shares of our common stock, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock.
The resale of shares of our common stock, or the perception that such resales could occur, could harm the prevailing market price of shares of our common stock.
As a result of the DuPont Transaction, we no longer own a research and development laboratory and we became dependent upon the performance and research capacity of a number of third-party contract research organizations and other service providers to conduct our research and development projects, pre-clinical, CMC and cGMP manufacturing, fill and finish, and potential clinical trials, which include services and programs in connection with the modification and enhancement of the Company’s C1-cell protein production platform and to support our business development efforts for C1’s use in biopharmaceutical applications.
We are dependent upon the performance and research capacity of a number of third-party CROs and other service providers to conduct our research and development projects, pre-clinical, CMC and cGMP manufacturing, fill and finish, and potential clinical trials, which include services and programs in connection with the modification and enhancement of the Company’s C1 platform and to support our business development efforts for C1’s use in biopharmaceutical and other applications.
Please refer to the section entitled “ Cautionary Note Regarding Forward-Looking Statements ” appearing on page [ 4 ] of this Annual Report for important information regarding reliance on forward-looking statements. 11 Risks Related to Our Business and Financial Condition We may not succeed in implementing our business strategy.
Certain statements contained in this Annual Report (including certain statements used in the discussion of our risk factors) constitute forward-looking statements. Please refer to the section entitled “ Cautionary Note Regarding Forward-Looking Statements ” for important information regarding reliance on forward-looking statements. Risks Related to Our Business and Financial Condition We may not succeed in implementing our business strategy.
Further, we, Danisco, and our current and future collaborators and licensees are subject to regulations in the other countries in which we operate outside of the U.S. and EU, which may have different rules and regulations depending on the jurisdiction. Different countries have different rules regarding which products qualify as GMOs.
The EU and other countries also have regulations regarding the development, production and marketing of products from GMOs, which may be as or more restrictive than U.S. regulations. 26 Further, we, Danisco, and our current and future collaborators and licensees are subject to regulations in the other countries in which we operate outside of the U.S. and EU, which may have different rules and regulations depending on the jurisdiction.
If we fail to achieve one or more of these, it could have a material adverse effect on our business, financial condition and results of operations. ● Balance our cash burn with technology and product development; ● Maintain and add additional CROs (Contract Research Organizations), other third-party service providers or other technology collaborators; ● Maintain and add additional collaborators, strategic partners technology licensees or other forms of structures; ● Recruit, hire and maintain the required employees necessary to maintain and grow our business and to advance our technologies and products; ● Achieve technical and commercial success in our research and product development programs; ● Access required manufacturing capacity; ● Access additional capital; ● Recruit and maintain consultants, board members and scientific advisory board members; and ● Manage scientific risks and uncertainties that may arise during our R&D and regulatory programs. 13 Our revenue growth depends in part on market and regulatory acceptance of our microbial protein production platforms and other technologies to develop and manufacture animal and/or human biopharmaceutical and non-pharmaceutical products.
If we fail to achieve one or more of these, it could have a material adverse effect on our business, financial condition and results of operations. ● Balance our cash burn with technology and product development; ● Maintain and add additional CROs, other third-party service providers or other technology collaborators; ● Maintain and add additional collaborators, strategic partners technology licensees or other forms of structures ● Recruit, hire, and maintain the required employees necessary to maintain and grow our business and to advance our technologies and products; ● Achieve technical and commercial success in our research and product development programs; ● Manage our internal development and operational efforts effectively while carrying out our contractual obligations to third parties; ● Access required manufacturing capacity; ● Access additional capital; ● Recruit and maintain consultants, board members, and scientific advisory board members; and ● Manage scientific risks and uncertainties that may arise during our R&D and regulatory programs.
In addition, from time to time there are disagreements with such third parties that if not resolved can have a material adverse effect on our business, financial condition and operating results. We are heavily dependent upon the availability and performance of third-party research organizations.
In addition, from time to time there are disagreements with such third parties that if not resolved can have a material adverse effect on our business, financial condition and operating results.
Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and resources and could prevent us and our collaborators from commercializing our or their technologies and products or negatively impact our stock price.
There is a risk that we will abandon potentially valuable patents. 29 Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and resources and could prevent us and our collaborators from commercializing our or their technologies and products or negatively impact our stock price.
Should an economic slowdown occur in the U.S. or globally, our business and results of operations may be materially adversely affected. 15 We face risks related to widespread outbreaks of contagious disease or other biological threats, any of which could significantly disrupt our operations and have a material adverse effect on our business, employees, directors, consultants, collaborators and other third parties, including business development activities and research and development projects conducted by third party contract research organizations parties.
We face risks related to widespread outbreaks of contagious disease or other biological threats, any of which could significantly disrupt our operations and have a material adverse effect on our business, employees, directors, consultants, collaborators and other third parties, including business development activities and research and development projects conducted by third party contract research organizations parties.
Emalfarb may be able to control or significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of Mr.
Emalfarb controlled approximately 27.0% of our outstanding common stock as of December 31, 2024. Mr. Emalfarb may be able to control or significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of Mr.
The net losses we anticipate incurring over the next several years will have an adverse effect on our stockholders’ equity and working capital.
The net losses we anticipate incurring over the next several years will have an adverse effect on our working capital, financial condition, results of operations and prospects.
If any of these countries expand the definition of GMO and increase the regulatory burden on GMO products, our business could be harmed.
Different countries have different rules regarding which products qualify as GMOs. If any of these countries expand the definition of GMO and increase the regulatory burden on GMO products, our business could be harmed.
If they are successful, these new methods may supplant or greatly reduce the need for microorganisms, Carbon, Hydrogen, and Oxygen or other organisms, including our C1 cells and Dapibus™ , to produce these proteins externally as the injected cells in animals and humans may be able to do so internally. 14 Our SARS-CoV-2 vaccine candidates are at the clinical stage and have not been approved for sale.
If they are successful, these new methods may supplant or greatly reduce the need for microorganisms, carbon, hydrogen, and oxygen or other organisms, including our C1 cells and Dapibus™, to produce these proteins externally as the injected cells in animals and humans may be able to do so internally. 19 The results of nonclinical studies and early-stage clinical trials may not be predictive of future results.
Our success will depend in part upon our ability, and our current and future collaborators’ or licensees’ ability, to develop pharmaceutical and non-pharmaceutical products discovered, developed and manufactured through the C1- cell protein production platform, and our other technologies .
Public views on ethical and social issues may limit use of our technologies. Our success will depend in part upon our ability, and our current and future collaborators’ or licensees’ ability, to develop pharmaceutical and non-pharmaceutical products discovered, developed and manufactured through the C1 platform, and our other technologies.
Further regulatory complications, competition from other technologies, or delays in our research programs and the adoption and use of the C1-cell and Dapibus™ protein production platforms and our other technologies by the biopharmaceutical and non-pharmaceutical industries may force us to reduce our staffing and research and development efforts, which may further affect our ability to generate cash flow.
Further regulatory complications, competition from other technologies, or delays in our research programs and the adoption and use of the C1-cell and Dapibus™ protein production platforms and our other technologies by the biopharmaceutical and non-pharmaceutical industries may force us to reduce our staffing and research and development efforts, which may further affect our ability to generate cash flow. 17 We may expend our resources to pursue particular product candidates and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of success.
If any third party is able to gain intellectual property protections for technology similar to our own, they may be successful in blocking us and our licensees from using the C1-cell protein production platform or our other technologies and/or commercializing products derived from them. 20 We cannot ensure that any of our pending patent applications will result in issued patents, or even if issued, predict the breadth of the claims upheld in our and other companies’ patents.
If any third party is able to gain intellectual property protections for technology similar to our own, they may be successful in blocking us and our licensees from using the C1 platform or our other technologies and/or commercializing products derived from them.
These changes have had, and may continue to have, a negative effect on our business, results of operations, financial condition and liquidity.
Changes in the global financial, pharmaceutical and biotech markets may make it difficult to accurately forecast operating results. These changes have had, and may continue to have, a negative effect on our business, results of operations, financial condition and liquidity.
Any biopharmaceutical products we or our current collaborators or licensees develop through the C1-cell protein production platform, or through our other technologies, will compete in highly competitive and regulated markets.
As such, any products we or our current collaborators or licensees develop through the C1 platform, or through our other technologies, will compete in highly competitive and regulated markets. For more information on our competition, see “Item 1.
The timing and nature of a sustained recovery in the credit and financial markets remain uncertain, and there can be no assurance that market conditions will significantly improve in the near future or that our results will not continue to be materially and adversely affected.
The timing and nature of a sustained recovery in the credit and financial markets remain uncertain, and there can be no assurance that market conditions will significantly improve in the near future or that our results will not continue to be materially and adversely affected. 20 In addition, geopolitical risks, including those arising from political turmoil, trade tension or the imposition of trade tariffs and/or sanctions, terrorist activity and acts of civil or international hostility, are increasing.
If we lose key personnel, including key management or board members, or are unable to attract and retain additional personnel, it could delay our technology and product development programs and harm our R&D efforts, and we may be unable to pursue research funding, licenses and other forms of collaborations or develop our own products.
Any violations of international laws and regulations may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences. 21 If we lose key personnel, including key management or board members, or are unable to attract and retain additional personnel, it could delay our technology and product development programs and harm our R&D efforts, and we may be unable to pursue research funding, licenses and other forms of collaborations or develop our own products.
Hiring and training new personnel will entail costs and may divert our resources and attention from revenue-generating efforts. In addition, we periodically engage consultants to assist us in our business and operations. These consultants operate as independent contractors, and we therefore do not have as much control over their activities as we do over the activities of our employees.
Personnel changes may disrupt our operations. Hiring and training new personnel will entail costs and may divert our resources and attention from revenue-generating efforts. In addition, we periodically engage consultants to assist us in our business and operations.
These claims could be brought by various parties, including other companies who purchase products from our current and future collaborators and licenses or by end users of the products.
These claims could be brought by various parties, including other companies who purchase products from our current and future collaborators and licenses or by end users of the products. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates.
Changes to our outsourced software or infrastructure vendors as well as any sudden loss, breach of security, disruption or unexpected data or vendor loss associated with our information technology systems could have a material adverse effect on our business. We rely on third-party software and infrastructure to run critical accounting, project management and financial information systems.
For more information, see “— We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively. ” Changes to our outsourced software or infrastructure vendors as well as any sudden loss, breach of security, disruption or unexpected data or vendor loss associated with our information technology systems could have a material adverse effect on our business.
Likewise, cyber incidents, including malicious cyber-attacks perpetrated on our employees and cyber incidents caused by third parties surreptitiously accessing our systems by other means, are an on-going risk to the security of the systems, networks, information and data of ours, our customers, subcontractors and suppliers.
See “— The use of new and evolving technologies, such as artificial intelligence ( “ AI ” ), in our business may result in reputational harm, competitive harm or legal liability. ” Likewise, cyber incidents, including malicious cyber-attacks perpetrated on our employees and cyber incidents caused by third parties surreptitiously accessing our systems by other means, are an on-going risk to the security of the systems, networks, inf ormation and data of ours, our customers, subcontractors and suppliers.
We may not be able to raise funds on terms that are favorable to us, if at all. If we fail to raise sufficient funds and incur losses, our ability to fund our operations, take advantage of strategic opportunities, develop products or technologies, or otherwise respond to competitive pressures could be significantly limited.
See, for example, “— Changes in global economic and financial markets may have a negative effect on our business. ” If we fail to raise sufficient funds and incur losses, our ability to fund our operations, take advantage of strategic opportunities, develop products or technologies, or otherwise respond to competitive pressures could be significantly limited.
Emalfarb Trust U/A/D October 1, 1987, as amended (the “MAE Trust”) of which he is the trustee and beneficiary, owned approximately 15.7% of our outstanding common stock as of December 31, 2023 . Further, the Francisco Trust U/A/D February 28, 1996 (the “Francisco Trust”), whose beneficiaries are the descendants and spouse of Mr.
Our Founder and Chief Executive Officer Mark Emalfarb, through the Mark A. Emalfarb Trust U/A/D October 1, 1987, as amended (the “MAE Trust”) of which he is the trustee and beneficiary, owned approximately 15.6% of our outstanding common stock as of December 31, 2024.
Concentration of ownership among our existing officers, directors and principal stockholders may prevent other stockholders from influencing significant corporate decisions and depress our stock price.
Concentration of ownership among our existing officers, directors and principal stockholders may prevent other stockholders from influencing significant corporate decisions and depress our stock price. Our executive officers, directors and principal stockholders (5% stockholders) together control approximately 34.7% of our 29,835,799 shares of outstanding common stock as of December 31, 2024.
The dynamic and conservative nature of the biopharmaceutical industry, the unpredictable nature of the product development process and the time and cost of new technology adoption in the biopharmaceutical industry may affect our ability to meet the requirements of the marketplace or achieve market and/or regulatory acceptance.
The dynamic and conservative nature of the industries in which we operate, the unpredictable nature of the product development process and the time and cost of new technology adoption in the industries in which we operate may affect our ability to meet the requirements of the marketplace or achieve market and/or regulatory acceptance. 18 The expenses or losses associated with unsuccessful technology and product development activities or lack of market acceptance of our new technologies and products could harm our business, financial condition and results of operations.
In addition, new laws, new interpretations of existing laws, increased government enforcement of environmental laws, or other developments could require us or our CROs or other service providers to make additional significant expenditures.
In recent years, environmental, health and safety laws and regulations have become increasingly more stringent, although this may change under the new U.S. presidential administration. In addition, new laws, new interpretations of existing laws, increased government enforcement of environmental laws, or other developments could require us or our CROs or other service providers to make additional significant expenditures.
Emalfarb, owned approximately 12.3% of our outstanding common stock as of December 31, 2023 . We have historically been partially controlled, managed and partially funded by Mr. Emalfarb, and affiliates of Mr. Emalfarb. Collectively, Mr. Emalfarb and stockholders affiliated with Mr. Emalfarb controlled approximately 28.0% of our outstanding common stock as of December 31, 2023 . Mr.
Further, the Francisco Trust U/A/D February 28, 1996 (the “Francisco Trust”), whose beneficiaries are the descendants and spouse of Mr. Emalfarb, owned approximately 11.4% of our outstanding common stock as of December 31, 2024. We have historically been partially controlled, managed and partially funded by Mr. Emalfarb, and affiliates of Mr. Emalfarb. Collectively, Mr. Emalfarb and stockholders affiliated with Mr.
The biopharmaceutical industry is a high-risk industry in that even if we are successful at expressing certain proteins, these proteins may fail to be advanced or approved for use or sale for many reasons including their characteristics, biological activity, biological comparability, biological similarity, stability, glycosylation structures, containments, purity, performance, safety and regulatory reasons.
The biopharmaceutical industries in which we operate are high-risk industries in that even if we are successful at expressing certain proteins, these proteins may fail to be advanced or approved for use or sale for many reasons including their characteristics, biological activity, biological comparability, biological similarity, stability, glycosylation structures, containments, purity, performance, safety and regulatory reasons. 16 Because of the numerous risks and uncertainties associated with pharmaceutical and other product development, we are unable to predict the timing or amount of increased expenses or when, or if, we will be able to achieve certain technology, product and/or commercial milestones, access fees and royalties, launch products and/or processes, or achieve profitability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Executive Officer and Chief Financial Officer are principally responsible for overseeing the cybersecurity risk management program, in partnership with outside consultants, as well as managing and responding to material cyber incidents if any occur.
Biggest changeOur Chief Executive Officer and Chief Financial Officer are principally responsible for overseeing the cybersecurity risk management program, in partnership with outside consultants, as well as managing and responding to material cyber incidents if any occur. Our CFO also serves as a board member at a cybersecurity and mobile IT solutions company.
We have established policies and controls for assessing, identifying and managing material cybersecurity risks and responding to material cybersecurity incidents. We routinely assess material cybersecurity risks, including potential unauthorized occurrences on, or conducted through, our information systems that may compromise the confidentiality, integrity or availability of those systems or information maintained in them.
We have established policies and controls for assessing, identifying and managing material cybersecurity risks and responding to material cybersecurity incidents. 34 We routinely assess material cybersecurity risks, including potential unauthorized occurrences on, or conducted through, our information systems that may compromise the confidentiality, integrity or availability of those systems or information maintained in them.
We conduct these risk assessments directly and also periodically engage third-party providers to support these processes. 24 Following these risk assessments, we evaluate how to appropriately implement and maintain reasonable safeguards to mitigate identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
We conduct these risk assessments directly and also periodically engage third -party providers to support these processes. Following these risk assessments, we evaluate how to appropriately implement and maintain reasonable safeguards to mitigate identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
They will provide periodic briefings to the Audit Committee and to the Board of Directors about our cybersecurity risks and activities, including cybersecurity incidents and responses, cybersecurity systems testing, third-party activities and related topics. In addition, our policies for managing and responding to cybersecurity incidents include procedures for appropriate escalations to our Audit Committee Chair.
They provide periodic briefings to the Audit Committee and to the Board of Directors about our cybersecurity risks and activities, including cybersecurity incidents and responses, cybersecurity systems testing, third-party activities and related topics. In addition, our policies for managing and responding to cybersecurity incidents include procedures for appropriate escalations to our Audit Committee Chair.
We have not, to date, experienced a cybersecurity incident that was determined to be material, although, like any technology provider, we have experienced incidents in the past. Despite our cybersecurity efforts, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on our business.
We have not, to date, experienced a cybersecurity incident that was determined to be material, although, as a technology provider, we have experienced incidents in the past. Despite our cybersecurity efforts, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on our business.
We may also [obligate] certain third-party business partners to certify that they can implement and maintain appropriate security measures, consistent with all applicable laws, in connection with their work for us, and to promptly report any suspected breach of their security measures that may affect the Company.
We may a lso obligate certa in third -party business partners to certify that they can implement and maintain appropriate security measures, consistent with all applicable laws, in connection with their work for us, and to promptly report any suspected breach of their security measures that may affect the Company.
For additional information regarding whether any risks from cybersecurity threats are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K.
For additional information regarding whether any risks from cybersecurity threats are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to “Item 1A, Risk Factors” in this Annual Report on Form 10-K.
Added
Although our CEO and CFO do not otherwise have cybersecurity expertise, their many years in Company management and risk oversight more generally position them well to oversee the cybersecurity risk management program, which they do in partnership with outside consultants.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn August 2023, the Company entered into a new lease comprising approximately 1,719 square feet of office space located at 1044 N US 1, Jupiter, Florida, commencing September 1, 2023 (“Commencement Date”). Rent is subject to three percent (3%) annual increases, and the Company is responsible for certain common area maintenance charges and taxes throughout the life of the lease.
Biggest changeRent is subject to three percent (3%) annual increases, and the Company is responsible for certain common area maintenance charges and taxes throughout the life of the lease. The Company maintains a small satellite office in Wageningen, The Netherlands under a lease with an annual rental rate of approximately $4,600.
We believe that our current office spaces are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space is available to accommodate any expansion of our operations, but such space may not be available in the same building if and when such space is needed.
We believe that our current office spaces are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space is available to accommodate any expansion of our operations, but such space may not be available in the same building if and when such space is needed. 35
The Company occupies a flexible office space for an annual rental rate of approximately $4,800. The lease expires on January 31, 2025, and thereafter, the Company will reconsider the leased space to align with the future operations of the Company.
The lease expires on January 31, 2026, and thereafter, the Company intends to reevaluate the need for the leased space to align with the future operations of the Company.
Removed
Item 2. Properties Leases Jupiter, Florida Headquarters The Company’s prior lease for its corporate headquarters located at 140 Intracoastal Pointe Dr. located in Jupiter Florida, expired on August 31, 2023.
Added
Item 2. Properties The Company maintains its corporate headquarters at 1044 N US 1, Jupiter, Florida under a lease expiring on August 31, 2026, with an option to extend for two (2) successive one (1) year terms. The Company occupies this space with an annual rental rate of approximately $59,000, excluding common maintenance expenses.
Removed
The lease has an initial term of three (3) years, following the Commencement Date with an option to extend for two (2) successive one (1) year terms.
Removed
The option to extend were not included in the lease term used in determining the right-of-use asset or lease liability, as the Company did not consider it reasonably certain that it would exercise the option. The Netherlands Office The Company maintains a small satellite office in Wageningen, The Netherlands.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Item 4.
Biggest changeItem 3. Legal Proceedings From time to time, the Company is subject to legal proceedings, asserted claims and investigations in the ordinary course of business, including commercial claims, employment and other matters, which management considers immaterial, individually and in the aggregate.
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Mine Safety Disclosures Not applicable for our operations. 25 PART II
Item 4. Mine Safety Disclosures Not applicable for our operations. PART II
Item 3. Legal Proceedings We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations.
Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations.
Added
For more information, see Note 4 to the Consolidated Financial Statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Performance Graph We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.
Biggest changeEquity Performance Graph We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. 36 Item 6. [Reserved]
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities Market Information As of December 31, 2023 , Dyadic had two classes of capital stock authorized, common stock and preferred stock. Effective April 17, 2019, our common stock began trading on the NASDAQ Stock Market LLC’s NASDAQ Capital Market, under the symbol “DYAI”.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities Market Information As of December 31, 2024 , Dyadic had two classes of capital stock authorized, common stock and preferred stock. Effective April 17, 2019, our common stock began trading on the NASDAQ Stock Market LLC’s NASDAQ Capital Market, under the symbol “DYAI”.
There were no shares of preferred stock outstanding for the reported period. The number of record holders of our common stock as of December 31, 2023 was 50 , including The Depository Trust Company, which holds shares of our common stock on behalf of an indeterminate number of beneficial owners.
There were no shares of preferred stock outstanding for the reported period. The number of record holders of our common stock as of December 31, 2024 was 47 , including The Depository Trust Company, which holds shares of our common stock on behalf of an indeterminate number of beneficial owners.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

40 edited+21 added−14 removed37 unchanged
Biggest changeFor the year ended December 31, 2023, the Company received $1.3 million from the sale of its equity interest in Alphazyme, LLC and $600,000 upfront payment for a product development and licensing agreement. 30 On March 8, 2024, the Company sold and issued an aggregate principal amount of $6.0 million of its 8.0% Senior Secured Convertible Promissory Notes due March 8, 2027 (the “Convertible Notes”) in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
Biggest changeOn March 8, 2024, the Company issued an aggregate principal amount of $6.0 million of its 8.0% Senior Secured Convertible Promissory Notes due March 8, 2027 (the “ Convertible Notes”) in a private placement.
In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or licensed in by Danisco.
In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or in licensed by Danisco.
In addition, because some of the performance-based options issued to employees, consultants and other third-parties vest upon the achievement of certain milestones, the total ultimate expense of share-based compensation is uncertain. Accounting for Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, “Income Taxes”.
In addition, because some of the performance-based options issued to employees, consultants and other third-parties vest upon the achievement of certain milestones, the total ultimate expense of share-based compensation is uncertain. 39 Accounting for Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, “Income Taxes”.
Over the past two plus decades, the Company has developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and has previously licensed this technology to third parties, such as Abengoa Bioenergy SA, BASF SE, Codexis, Inc. and others, for use in industrial (non-pharmaceutical) applications.
Over the past two plus decades, the Company developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and previously licensed this technology to third parties, such as Abengoa Bioenergy SA, BASF SE, Codexis, Inc. and others, for use in industrial (non-pharmaceutical) applications.
The success of the Company depends on its ability to develop its technologies and products to the point of regulatory approval and subsequent revenue generation or through sublicensing of the Company’s technologies and products, to raise enough capital to finance these developmental efforts.
The success of the Company depends on its ability to develop its technologies and products to the point of regulatory approval and subsequent revenue generation or through the sublicensing of the Company’s technologies and products, and its ability to raise capital to finance these developmental efforts.
The Company classifies accrued interest and penalties related to its tax positions as a component of income tax expense. The Company currently is not subject to U.S. federal, state and local tax examinations by tax authorities for the years before 2017. See Note 4 to the Consolidated Financial Statements. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements.
The Company classifies accrued interest and penalties related to its tax positions as a component of income tax expense. The Company currently is not subject to U.S. federal, state and local tax examinations by tax authorities for the years before 2017. See Note 8 to the Consolidated Financial Statements. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements.
(“Dyadic”, “we”, “us”, “our”, or the “Company”) is a global biotechnology company based in Jupiter, Florida with operations in the United States and a satellite office in the Netherlands, and it utilizes several third-party consultants and research organizations to carry out the Company’s activities.
(“Dyadic”, “we”, “us”, “our”, or the “Company”) is a global biotechnology platform company based in Jupiter, Florida with operations in the United States and a satellite office in the Netherlands, and it utilizes several third-party consultants and contract research organizations to carry out the Company’s activities.
Danisco retained certain rights to utilize the C1-cell protein production platform in pharmaceutical applications, including the development and production of pharmaceutical products, for which it will be required to make royalty payments to Dyadic upon commercialization.
Danisco retained certain rights to utilize the C1 platform in pharmaceutical applications, including the development and production of pharmaceutical products, for which it will be required to make royalty payments to Dyadic upon commercialization.
Cash flows from investing activities in 2023 were primarily related to proceeds from maturities, net of purchases of investment grade debt securities, and proceeds from the sale of investment in Alphazyme. Cash flows from investing activities in 2022 were primarily related to proceeds from maturities, net of purchases of investment grade debt securities.
Cash flows from investing activities in 2024 and 2023 were primarily related to proceeds from maturities, net of purchases of investment grade debt securities, and proceeds from the sale of investment in Alphazyme.
The decrease in revenue and cost of research and development revenue was due to higher individual contract amounts on certain research funding and related work performed during 2022.
The decrease in research and development revenue and cost of research and development revenue was due to higher individual contract amounts on certain research funding and related work performed during 2023.
In the event our financing needs are not able to be met by our existing cash, cash equivalents and investments, we would seek to raise additional capital through strategic financial opportunities that could include, but are not limited to, future public or private equity offerings, collaboration agreements, and/or other means.
In the event our financing needs are not able to be met by our existing cash, cash equivalents and investments, we would seek to raise additional capital through strategic financial opportunities that could include, but are not limited to, future public or private equity offerings, collaboration agreements, convertible notes or other debt instruments, and/or other means.
The purchasers of the Convertible Notes include immediate family members and family trusts related to Mark Emalfarb, our President and Chief Executive Officer and a member of our Board of Directors, including The Francisco Trust, an existing holder of more than 5% of the Company’s outstanding common stock, (collectively, the “Purchasers”).
The purchasers of the Convertible Notes included immediate family members and family trusts related to Mark Emalfarb, our President and Chief Executive Officer and a member of our Board of Directors, including The Francisco Trust, an existing holder of more than 5% of the Company’s outstanding common stock, (collectively, the “ Purchasers”).
Foreign Currency Exchange Foreign currency exchange loss for the year ended December 31, 2023 was $38,000 compared to $50,000 for the year ended December 31, 2022. The decrease reflected the currency fluctuation of the Euro in comparison to the U.S. dollar.
Foreign Currency Exchange Foreign currency exchange loss for the year ended December 31, 2024 was $23,000 compared to $38,000 for the year ended December 31, 2023. The decrease reflected the currency fluctuation of the Euro in comparison to the U.S. dollar.
As part of the DuPont Transaction, Dyadic retained co-exclusive rights to the C1-cell protein production platform for use in all human and animal pharmaceutical applications, and currently the Company has the exclusive ability to enter into sub-license agreements (subject to the terms of the license and to certain exceptions) for use in all human and animal pharmaceutical applications.
As part of the DuPont Transaction, Dyadic retained co-exclusive rights to its proprietary and patented C1 protein production platform (the “C1 platform”) for use in all human and animal pharmaceutical applications, and currently, the Company has the exclusive ability to enter into sub-license agreements (subject to the terms of the license and to certain exceptions) for use in all human and animal pharmaceutical applications.
The Convertible Notes will be senior, secured obligations of Dyadic and its affiliates, and interest will be payable quarterly in cash on the principal amount equal to 8% per annum. The Convertible Notes will mature on March 8, 2027 (the “Maturity Date”), unless earlier converted, repurchased, or redeemed in accordance with the terms of the Convertible Notes.
The Convertible Notes are senior, secured obligations of Dyadic and its affiliates, and interest is payable quarterly in cash on the principal amount equal to 8% per annum. The Convertible Notes will mature on March 8, 2027 (the “ Maturity Date”), unless earlier converted, repurchased, or redeemed in accordance with the terms of the Convertible Notes.
The net proceeds from the sale of the Convertible Notes, after deducting offering expenses, are approximately $5,850,000. The Company intends to use the net proceeds from the offering of the Convertible Notes for working capital and general corporate purposes.
The net proceeds from the sale of the Convertible Notes, after deducting offering expenses, were $5,824,000. The Company intends to use the net proceeds from the offering of the Convertible Notes for working capital and general corporate purposes.
Research and Development Expenses Research and development costs are expensed as incurred and primarily include salary and benefits of research personnel, third-party contract research organization services and supply costs. Research and development expenses for the year ended December 31, 2023 decreased to $3.3 million compared to $4.5 million for the year ended December 31, 2022.
Research and Development Expenses Research and development costs are expensed as incurred and primarily include salary and benefits of research personnel, third-party contract research organization services and supply costs. Research and development expenses for the year ended December 31, 2024 decreased to $2,044,000 compared to $3,297,000 for the year ended December 31, 2023.
The Convertible Notes will be convertible into shares of Dyadic’s Class A common stock (the “Common Stock”), at the option of the holders of the Convertible Notes (the “Noteholders”) at any time prior to the Maturity Date.
The Convertible Notes can be converted into shares of Dyadic’s Class A common stock (the “ Common Stock”), at the option of the holders of the Convertible Notes (the "Noteholders”) at any time prior to the Maturity Date.
The Company adopted a practical expedient to expense sales commissions when incurred because the amortization period would be one year or less. 28 Accrued Research and Development Expenses In order to properly record services that have been rendered but not yet billed to the Company, we review open contracts and purchase orders, communicate with our personnel and we estimate the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.
Accrued Research and Development Expenses In order to properly record services that have been rendered but not yet billed to the Company, we review open contracts and purchase orders, communicate with our personnel and we estimate the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.
The license revenue for the year ended December 31, 2023 was in connection with the Janssen license agreement, and for the year ended December 31, 2022 was in connection with the Phibro/Abic and Janssen license agreements.
The license revenue for the year ended December 31, 2024 was in connection with the Inzymes and Proliant license agreements, and for the year ended December 31, 2023 was in connection with the Janssen license agreement.
Net cash used in operating activities for the year ended December 31, 2023 of $ 6.7 million resulted from a net loss of $ 6.8 million adjusted for share-based compensation expenses of $ 1.2 million, partially offset by sale of our investment in Alphazyme of $1.0 million, and changes in operating assets and liabilities of $0.1 million.
Net cash used in operating activities for the year ended D ecember 31, 2023 of $6,727,000 resulted from a net loss of $6,795,000 adjusted for share-based compensation expenses of $1,244,000, partially offset by sale of our investment in Alphazyme of $1,018,000, and changes in operating assets and liabilities of $143,000.
We expect our existing cash and cash equivalents and cash raised from the Convertible Notes, investments in debt securities, and operating cash flows will be sufficient to meet our operational, business, and other liquidity requirements for at least the next twelve (12) months from the date of issuance of the financial statements contained in this Form 10-K.
The Company expects its existing cash and cash equivalents and cash raised from the Convertible Notes, the Gates Foundation Grant, investments in debt securities, and operating cash flows from its existing and future license agreement(s) will be sufficient to meet its operational, business, and other liquidity requirements for at least the next twelve (12) months from the date of issuance of the financial statements contained in this Annual Report.
If the milestone payment is in exchange for a sublicense and is based on the sublicensee’s subsequent sale of product, the Company recognizes milestone payment by applying the accounting guidance for royalties. To date, the Company has not recognized any milestone payment revenue resulting from any of its sublicensing arrangements.
If the milestone payment is in exchange for a sublicense and is based on the sublicensee’s subsequent sale of product, the Company recognizes milestone payment by applying the accounting guidance for royalties.
The remaining amount of the net operating loss carryforwards will expire at varying dates through 2037. Net Loss Net loss for the year ended December 31, 2023 was $6.8 million compared to a net loss of $9.7 million for the year ended December 31, 2022.
The remaining amount of the net operating loss carryforwards will expire at varying dates through 2038. Net Loss Net loss for the year ended December 31, 2024 was $ 5,809,000 compared to a net loss of $6,795,000 for the year ended December 31, 2023 .
Net cash provided by investing activities for the year ended December 31, 2023 was $ 7.5 million compared to net cash used in investing activities of $ 2.4 million for the year ended December 31, 2022 .
Net cash used in investing activities for the year ended December 31, 2024 was $1,876,000 compared to net cash provided by investing activities of $7,450,000 for the year ended December 31, 2023 .
There was no net cash provided by financing activities for the year ended December 31, 2023 compared to $544,000 for the year ended December 31, 2022 . Cash flows from financing activities in 2022 were primarily related to proceeds received from the exercise of stock options.
Net cash provided by financing activities for the year ended December 31, 2024 was $5,849,000, which was related to net proceeds from issuance of convertible notes, and proceed from exercise of options. There were no cash flows from financing activities in 2023.
However, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change because of many factors currently unknown.
However, the Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it.
Income Taxes The Company had net operating loss (“NOL”) carryforwards available as of December 31, 2023 and 2022, in the amount of approximate ly $45.9 million and $44.0 million, respectively. Approximately $42.9 milli on of the net operating loss carryforwards will be carried forward indefinitely and will be available to offset 80% of taxable income.
Income Taxes The Company had net operating loss (“NOL”) carryforwards available as of December 31, 2024 and 2023 , in the amount of approximately $49,903,000 and $45,850,000, respectively. Approximately $46,965,000 of the NOL carryforwards will be carried forward indefinitely and will be available to offset 80% of taxable income.
The decrease primarily reflected the winding down of activities related to the Company’s Phase 1 clinical trial of DYAI-100 COVID-19 vaccine candidate. General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023, decreased to $5.8 million compared to $6.4 million for the year ended December 31, 2022.
The decrease was due to the completion of activities related to the Company’s Phase 1 clinical trial of DYAI-100 COVID-19 vaccine candidate. General and Administrative Expenses General and administrative expenses for the year ended December 31, 2024 increase d to $6,135,000 compared to $5,817,000 for the year ended December 31, 2023 .
We expect to incur losses and have negative net cash flows from operating activities as we continue developing our microbial platforms and related products, and as we expand our pipeline and engage in further research and development activities for internal products as well as for our third-party collaborators and licensees.
The Company expects to incur losses and have negative net cash flows from operating activities as it continues developing its microbial protein production platforms and related products, and as it expands its pipelines and engages in further research and development activities for internal products as well as for its third-party collaborators and licensees.
After the DuPont Transaction, the Company has been building innovative microbial platforms to address the growing demand for global protein bioproduction and unmet clinical needs for effective, affordable, and accessible biopharmaceutical products for human and animal health and for other biologic products for use in non-pharmaceutical applications.
For the past nine years since the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE: DD) (the “DuPont Transaction”), the Company has been focused on building innovative microbial protein production platforms to address the growing demand for global protein bioproduction and unmet clinical needs for effective, affordable, and accessible biopharmaceutical products for human and animal health and for other biologic products for use in non-pharmaceutical applications.
Revenue related to sublicensing agreements: If the sublicense to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when technology is transferred to the customer and the customer can use and benefit from the license.
Revenue related to sublicensing agreements: If the sublicense to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when technology is transferred to the customer and the customer can use and benefit from the license. 38 Customer options: If the sublicensing agreement includes customer options to purchase additional goods or services, the Company will evaluate if such options are considered material rights to be deemed as separate performance obligations at the inception of each arrangement.
Recent Accounting Pronouncements See Note 1 to the Consolidated Financial Statements for information about recent accounting pronouncements . 29 Results of Operations Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Revenue and Cost of Revenue The following table summarizes the Company’s revenue and cost of research and development revenue for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Research and development revenue $ 2,545,865 $ 2,683,244 License revenue $ 352,941 $ 247,059 Cost of research and development revenue $ 1,975,849 $ 2,123,193 For the years ended December 31, 2023 and 2022 , the Company’s revenue was generated from sixteen and fourteen collaborations, respectively.
Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Revenue and Cost of Revenue The following table summarizes the Company’s revenue and cost of research and development revenue for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Research and development revenue $ 1,605,220 $ 2,545,865 License revenue $ 1,890,169 $ 352,941 Cost of research and development revenue $ 1,194,624 $ 1,975,849 40 For the years ended December 31, 2024 and 2023, the Company’s revenue was generated from 19 and 16 collaborations, respectively.
Any amounts raised may be used for the further development and commercialization of product candidates, and for other working capital purposes. There is no guarantee that any of these strategic or financing opportunities will be executed or realized on favorable terms, if at all, and some could be dilutive to existing shareholders.
There is no guarantee that any of these strategic or financing opportunities will be executed or realized on favorable terms, if at all, and some could be dilutive to existing shareholders At December 31, 2024 , cash and cash equivalents were $6,507,000 compared to $6,515,000 at December 31, 2023 .
This technology is based on the Thermothelomyces heterothallica (formerly known as Myceliophthora thermophila ) fungus, which the Company named C1. On December 31, 2015, the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE: DD) (the “DuPont Transaction”).
This technology is based on the Thermothelomyces heterothallica (formerly known as Myceliophthora thermophila ) fungus, which the Company named C1.
For purposes of the calculation, we assumed that no dividends would be paid during the life of the options.
For purposes of the calculation, we assumed that no dividends would be paid during the life of the options. We also used the weighted-average vesting period and contractual term of the option as the best estimate of the expected life of a new option.
Net cash used in operating activities for the year ended December 31, 2022 of $8.1 million resulted from a net loss of $9.7 million adjusted for share-based compensation expenses of $1.9 million, offset by changes in operating assets and liabilities of $0.3 million.
The carrying value of investment grade securities, including accrued interest at December 31, 2024 was $2,781,000 compared to $758,000 at December 31, 2023 . 42 Net cash used in operating activities for the year ended December 31, 2024 of $3,975,000 resulted from a net loss of $5,809,000 adjusted for share-based compensation expenses of $1,126,000 , partially offset by changes in operating assets and liabilities of $755,000.
The Company also developed the Dapibus™ thermophilic filamentous fungal based microbial protein production platform to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness. 27 Critical Accounting Estimates The preparation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates that affect the reported amount of assets and liabilities and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the applicable period.
The Company anticipates achieving commercialization of certain alternative protein products in 2025 through a combination of existing collaborations and internal manufacturing efforts. 37 Critical Accounting Estimates The preparation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates that affect the reported amount of assets and liabilities and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the applicable period.
The decrease principally reflected a decrease in management incentives of $466,000, business development and investor relations costs of $219,000, and legal expenses of $39,000, partially offset by increases insurance premiums of $96,000, and other increases of $24,000.
The increase reflected increases in business development and investor relations expenses of $294,000, share-based compensation expenses of $109,000, professional service expenses of $82,000, and other increases of $84,000, partially offset by decreases in management incentive expenses of $124,000, legal expenses of $65,000 and insurance expenses of $64,000.
This private placement funding strengthened our financial position, and it will support our near term revenue growth and accelerate our strategic objective of commercialization opportunities for pharmaceutical and non-pharmaceutical applications. The Company has received successful top-line results for the Phase 1 clinical trial of DYAI-100, and we do not plan to continue Phase 2/3 clinical trials unless funding is secured.
This private placement funding is expected to support our near-term revenue growth and accelerate our strategic objective of commercialization opportunities for pharmaceutical and non-pharmaceutical applications. On October 4, 2024, the Company entered into an amendment (the "Amendment”) to the Convertible Notes.
Removed
The C1-cell protein production platform is a robust and versatile thermophilic filamentous fungal expression system for the development and production of biologic products including enzymes and other proteins for human and animal health.
Added
After the DuPont Transaction, the Company has directed its efforts toward advancing the C1 platform to address the increasing global demand for the development and manufacturing of prophylactic and therapeutic biopharmaceuticals for human and animal health.
Removed
Some examples of human and animal vaccines and drugs which have the potential to be produced from C1-cells are protein antigens, ferritin nanoparticles, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins.
Added
The Company’s biopharmaceutical development efforts have been centered on enhancing the capability of the C1 platform to produce stable, properly folded, and functional proteins for pharmaceutical applications, including vaccines and monoclonal antibodies.
Removed
The Company is involved in multiple funded research collaborations with animal and human pharmaceutical companies which are designed to leverage its C1-cell protein production platform to develop innovative vaccines and drugs, biosimilars and/or biobetters.
Added
In addition to improving the quality and productivity of the C1 platform, the Company has sought to validate its platform for human use through a series of fully funded biopharmaceutical projects, extensive animal studies utilizing C1-produced proteins, and in 2024, the successful completion of a Phase 1 first-in-human study for a vaccine antigen produced using C1, which demonstrated its safety for human applications.
Removed
Customer options: If the sublicensing agreement includes customer options to purchase additional goods or services, the Company will evaluate if such options are considered material rights to be deemed as separate performance obligations at the inception of each arrangement.
Added
Recognizing the longer development timelines, clinical testing, and regulatory requirements associated with human and animal pharmaceutical products, the Company has refined its core business strategy to expand into recombinant (non-animal derived) alternative proteins for non-pharmaceutical applications in research, nutrition, and industrial markets.
Removed
We also used the weighted-average vesting period and contractual term of the option as the best estimate of the expected life of a new option, except for the options granted to the CEO (i.e., 5 or 10 years) and certain contractors (i.e., 1 or 3 years).
Added
To address these opportunities, the Company has developed and launched the Dapibus™ Protein Production Platform (“Dapibus™”), which supports various applications within the alternative proteins field, namely in Life Sciences, Food & Nutrition, and Bioindustrial applications.
Removed
Interest Income Interest income for the year ended December 31, 2023, increased to $417,000 compared to $180,000 for the year ended December 31, 2022. The increase was primarily due to an increase in interest rates and yield on the Company’s investment grade securities, which are classified as held-to-maturity.
Added
Given the reduced developmental costs, shorter timelines, and fewer regulatory requirements associated with alternative proteins, Dapibus™ has enabled the Company to generate near-term recurring revenue while continuing to build long-term value through C1 for pharmaceutical applications.
Removed
Other Income For the year ended December 31, 2023, the Company had a gain of approximately $1.0 million from the sale of the Company’s equity interest in Alphazyme, LLC. For the year ended December 31, 2022, the Company received a settlement payment of $250,000 from the termination of a proposed license and collaboration.
Added
The Company adopted a practical expedient to expense sales commissions when incurred because the amortization period would be one year or less.
Removed
The decrease in net loss of $2.9 million was principally due to decreases in research and development expenses of $1.2 million, general and administrative expenses of $605,000, and partially offset by an increase in other income of $768,000.
Added
Recent Accounting Pronouncements See Note 1 to the Consolidated Financial Statements for information about recent accounting pronouncements .
Removed
Liquidity and Capital Resources Our primary source of cash to date has been the cash received from the DuPont Transaction in 2015, interest income received from investment grade securities, revenues from our research collaboration agreements and license agreements, and funds from the exercise of employee stock options.
Added
Loss from Operations Loss from operations for the year ended December 31, 2024, decreased to $5,901,000 compared to $8,230,000 f or the year ended December 31, 2023.
Removed
The conversion price is $1.79 per share of the Common Stock, which is equal to 125% of the trailing 30-day VWAP of the Common Stock ending on the trading day immediately preceding the date of the securities purchase agreement. For more information regarding the Convertible Notes, including the covenants related thereto see Note 8 to the Consolidated Financial Statements.
Added
The decrease in loss from operations was largely due to an increase in licensing revenue of $1,000,000 from Proliant and $890,000 from Inzymes, including success fees in 2024 and the above-discussed decrease in research and development expenses associated with the completion of activities related to the Company’s Phase 1 clinical trial of DYAI-100 COVID-19 vaccine candidate.
Removed
Our ability to achieve profitability depends on many factors, including our scientific results and our ability to continue to obtain funded research and development collaborations from industry and government programs, as well as sub-license agreements. We may continue to incur substantial operating losses even if we begin to generate revenues from research and development and licensing.
Added
Other Income, Net For the year ended December 31, 2024, the total other income, net, of $92,000 compared to $1,434,000 for the year ended December 31, 2023.
Removed
Our primary future cash needs are expected to be for general operating activities, including our business development and research expenses, as well as legal and administrative costs as an SEC reporting and NASDAQ listed company. Our future cash requirements will depend on many factors, including those factors discussed under Item 1A. Risk Factors.
Added
The decrease was largely due to an increase in interest expenses of $428,000 related to the Convertible Notes in 2024 and a gain on the sale of the Company’s equity interest in Alphazyme, LLC of $1,018,000 in 2023.
Removed
As of December 31, 2023, we had an accumulated deficit of $ 80.3 million.
Added
The decrease in net loss of $986,000 was principally due to an increase in license revenue of $1,537,000 and a decrease in research and development expenses of $1,253,000, partially offset by an increase in general and administrative expenses of $318,000 and a decrease in other income of $1,343,000. 41 Liquidity and Capital Resources In accordance with FASB Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern (“Topic 205-40”), management is required to evaluate whether there are conditions and events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance date of the Company’s condensed interim financial statements.
Removed
At December 31, 2023 , cash and cash equivalents were $ 6.5 million compared to $ 5.8 million at December 31, 2022 . The carrying value of investment grade securities, including accrued interest at December 31, 2023 was $ 0.8 million compared to $ 6.9 million at December 31, 2022 .
Added
This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued.
Added
When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern.
Added
The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
Added
Pursuant to the Amendment, (i) the conversion price upon which the Convertible Notes will be convertible into shares of the Company’s common stock is $1.40 per share of common stock, and (ii) the Redemption Date (as defined in the Amendment) will fall on any of the 26, 29 and 32-month anniversaries of the origi nal issue date of the Convertible Notes, which are May 8, 2026, August 8, 2026 and November 8, 2026.
Added
The Convertible Notes contain customary covenants, and the Securities Purchase Agreement relating to the Convertible Notes also contains certain affirmative and negative covenants (including, without limitation, restrictions on our ability to incur indebtedness, permit liens, make dividends or certain debt payments or consummate certain affiliate transactions).
Added
The Company was in compliance with its covenants with respect to the Convertible Notes as of December 31, 2024. As of December 31, 2024, $910,000 of the Convertible Notes were converted into 556,623 shares of Common Stock. For more information regarding the Convertible Notes, including the covenants related thereto, see Note 5 to the Consolidated Financial Statements.
Added
In addition, on November 16, 2024, Dyadic entered into an agreement with the Bill & Melinda Gates Foundation (the “Gates Foundation”) relating to a grant in the amount of $3,092,136 awarded from the Gates Foundation for the cell line development of monoclonal antibodies targeting respiratory syncytial virus and malaria utilizing the Company’s C1 platform to provide globally accessible treatment options for underserved populations (the “Gates Foundation Grant”).
Added
Any amounts raised may be used for the further development and commercialization of product candidates, and for other working capital purposes.

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