Dyadic International Inc. Full Year 2025 Earnings Call - Transitioning to Commercial Revenues with Early Product Launches and Runway into 2027

Operator: I would now like to turn the call over to Mrs. Ping Rawson, Dyadic’s Chief Financial Officer. Please go ahead.

Ping Rawson, Chief Financial Officer, Dyadic International Inc.: Thank you, operator. Good evening, and welcome everyone to Dyadic’s full year 2025 conference call. I hope you have had the opportunity to review Dyadic’s press releases announcing financial results for the year ended December 31, 2025. You may access our release and Form 10-K under the investors section of the company’s website at dyadic.com. On today’s call, our President and Chief Operating Officer, Joe Hazelton, will review our full year 2025 business and corporate highlights and provide a commentary on the strategic direction of the business. Our CEO, Mark Emalfarb, will provide an update on our biopharmaceutical programs, and I will follow with a review of our financial results in more detail. After which, we’ll hold a brief Q&A session.

At this time, I would like to inform you that certain commentary made in this conference call may be considered forward-looking statements, which involve risks and uncertainties and other factors that could cause Dyadic’s actual results, performance, scientific or otherwise, or achievements to be materially different from those expressed or implied by these forward-looking statements. Dyadic expressly disclaims any duty to provide updates to its forward-looking statements, whether because of new information, future events, or otherwise. Participants are directed to the risk factors set forth in Dyadic’s report filed with the SEC. It is now my pleasure to pass the call to our President and COO, Joe Hazelton. Joe.

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: Thank you, Ping, and thank you everyone for joining. Since I stepped into the president’s role in June 2025, our focus has been very clear: to accelerate Dyadic’s transition from a development stage platform company into a commercial product-driven biotechnology business with multiple paths for revenue. Over the past nine months, we’ve made significant progress executing against that strategy. We’ve completed a corporate rebrand to Dyadic Applied BioSolutions, aligned the organization around commercialization, strengthened our technological capabilities through CRISPR licensing, secured manufacturing through our expanded Fermbox partnership, and most importantly, we began moving products into the market. I wanna emphasize this point up front. While our reported revenues today still reflect the company in transition, the underlying business has clearly advanced towards commercialization. In less than one year, we’ve matured from early-stage product development to commercial product launches, distribution agreements, initial product sales, and multiple revenue-generating partnerships.

Life sciences is our most advanced business, with the clearest near-term product revenue and repeat purchasing. We are building a portfolio of recombinant animal-free proteins for use in cell culture media and molecular biology workflows. These are not speculative markets. They are large, established, and growing markets that support biologic manufacturing, cell and gene therapy, cultivated meat, as well as diagnostics and research. These markets are rapidly shifting away from traditional animal-derived inputs towards state-of-the-art recombinant, high-quality, consistent and scalable alternatives, which aligns directly with our production platforms. I wanna highlight recombinant albumin as our leading example of progress in life sciences. Albumin is one of the most widely used proteins in biotechnology, critical for stabilizing biologics, supporting cell growth, and improving formulations across diagnostics, therapeutics, and research. Traditional human and animal-derived albumin introduces variability and supply limitations.

However, through our partnership with Proliant Health & Biologicals, we are now producing recombinant human albumin, which was commercially launched in early 2026. The Proliant product, recombinantly produced using Dyadic’s production platform, delivers consistent, high quality, and scalable supply while avoiding the risks associated with animal-derived products. The Proliant collaboration is a profit-sharing arrangement in which Dyadic participates directly in commercial success as Proliant expands commercial sales through their already established global sales channels. This is our first example of a Dyadic platform-enabled product reaching commercial scale with recurring revenue potential driven by our partner sales growth. Now, turning to our animal-free recombinant transferrin. Transferrin is a critical component of serum-free cell culture media, delivering iron essential for cell growth and viability. It’s widely used across biopharmaceutical manufacturing, cell and gene therapy, and cultivated meat.

We’re developing both bovine transferrin for cost-sensitive, high volume markets like cultivated meat, and human transferrin for higher spec applications such as cell and gene therapy and biopharmaceutical production. As a high-value recurring consumable, transferrin demand scales with customer production, directly linking their growth to our revenue. We have further advanced our commercialization capability through an OEM distribution agreement with IBT Bioservices, enabling global sales of our animal-free recombinant products such as DNase I and transferrin through IBT’s established distribution channels. This accelerates market penetration while supporting both near-term revenue and positions us for long-term volume growth as products are adopted into customer workflows. DNase I is a widely used high-value enzyme with applications across bioprocessing and molecular biology workflows. DNase I is used to remove residual DNA and is essential in areas such as cell and gene therapy manufacturing, biologics production, RNA workflows, and research and diagnostics.

We’ve completed production validation and together with Fermbox Bio, launched recombinant RNase-free DNase I as our first product commercialized under our expanded partnership with Fermbox Bio. As adoption grows, we expect progression from sampling to qualification to routine purchasing, driving steady volume growth. We’re also advancing growth factors, specifically fibroblast growth factor or FGF, which stimulates cell growth and is a key cost driver in cell culture systems, particularly in cultivated meat and advanced therapeutic applications. In the fourth quarter of 2025, we achieved our first sales of FGF, an important milestone reflecting technical validation and initial revenue. Growth factors are typically among the higher value inputs in cell culture systems, and as a result, can generate meaningful revenue even at modest volumes. We view this as the start of a broader portfolio targeting both high volume, cost-sensitive markets like cultivated meat and premium applications such as cell and gene therapy.

Our life science development has evolved into a multi-product portfolio serving large recurring end markets with multiple revenue channels, including direct product sales, distribution partnerships, and profit-sharing arrangements. These are markets where product adoption typically progresses from sampling to qualification and into scaled use, and we’re now entering the early stages of that curve. As these products move into routine use, we expect to see increasing repeat orders and revenue growth through 2026 and beyond. Turning to food and nutrition, this segment represents a significant opportunity driven by the global shift towards sustainable animal-free proteins and functional ingredients. Our strategy here is to leverage our Dapibus platform for large scale, cost-effective production of proteins that replicate the nutritional and functional properties of traditional dairy and food ingredients, while partnering with companies that have established market access and application expertise.

Another important development in 2025 was our agreement with BRIG BIO to develop and commercialize animal-free recombinant bovine alpha-lactalbumin for global health and nutrition markets. Alpha-lactalbumin is a key whey protein naturally present in human breast milk, which is essential for early childhood development due to its high nutritional value and amino acid composition. Demand is increasing for scalable, non-animal-produced recombinant alpha-lactalbumin to better replicate the benefits of human milk. This program includes funded development, milestone payments, and revenue participation, which aligns with our capital-efficient model of near-term funding and long-term royalties in a large growing market, where even modest market penetration can translate into meaningful revenue given the scale of global demand. We’re also advancing our human lactoferrin program, where we have established a stable production strain and are now optimizing yields and performance.

Lactoferrin is a high-value functional protein used in infant nutrition, dietary supplements, and wellness products due to its antimicrobial and immune-supporting properties. Compared to traditional sources, recombinant animal-free production offers improved consistency and scalability. We see potential for both direct sales and partner-driven revenue as we move towards commercialization. Another product approaching commercialization is recombinant bovine chymosin with our partner Enzymes, targeting a 2026 launch. Chymosin is a key enzyme in cheese production, enabling the coagulation of milk proteins into curds. To date, we’ve received upfront access fees and milestone payments with potential royalties during commercialization. This program reflects our capital-efficient partnership model of generating upfront fees and milestones while building long-term royalty streams without assuming downstream commercialization risk. More broadly, our food nutrition pipeline continues to expand across non-animal dairy proteins and food enzymes, supported by a growing demand for sustainable and functional ingredients.

As these programs advance toward commercialization, we expect increasing milestone achievements and product launches with more meaningful contribution from recurring revenues beginning in 2026. In the bio-industrial segment, our focus is on scaling our technology into large volume applications through strategic partnerships with an emphasis on capital efficiency and manufacturing leverage. A key component of this strategy is our expanded collaboration with Fermbox Bio, which provides access to commercial scale manufacturing and additional product development opportunities in multiple markets. This enables faster commercialization without investing significant capital in our own large-scale infrastructure, an important advantage in cost and volume-driven markets. One example is EN3ZYME, an enzyme cocktail produced using our Dapibus platform that converts agricultural residues into fermentable sugars for biofuels and other industrial applications.

Fermbox has fulfilled its first large-scale order and is expanding sampling and commercial activity, including in the Asia-Pacific region, demonstrating both performance and scalability in industrial settings. From a business model perspective, our collaboration with Fermbox is structured around participation in product economics, typically through profit-sharing arrangements. This provides exposure to high volume markets with scalable revenue potential while limiting our capital exposure. More broadly, our Dapibus platform is being applied across industrial segments, including biomass conversion, pulp and paper processing, sustainable materials, and bio-based manufacturing, such as microcrystalline cellulose and advanced nano materials. These markets are increasingly focused on efficiency and sustainability, where enzyme performance and cost profile are key drivers of adoption. We’re also leveraging the platform’s advantages of speed, yield, and cost efficiency within biopharmaceutical applications through partner-funded programs, enabling continued development without impacting near-term commercial execution.

With that, I’ll now turn the call over to Mark Emalfarb, our Dyadic CEO, to provide an update on these collaborations. Mark?

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: Thank you, Joe, and good evening, everyone. We continue to advance our partner-funded biopharmaceutical collaborations, applying the C1 platform into vaccines and antibody development through a non-dilutive capital-efficient model. Across multiple programs, including infectious disease, vaccines, and monoclonal antibodies, we’re seeing consistent expression, proper protein folding, and functional activity, supporting performance comparable to mammalian and insect cell production systems. To highlight a few efforts, our Gates Foundation collaboration continues to progress. With approximately $2.4 million received to date under a $3 million grant, early data shows C1-derived monoclonal antibodies targeting RSV and malaria are comparable to CHO-produced material supporting further development. In our CEPI collaboration with the Fondazione Biotecnopolo di Siena, we’re advancing recombinant vaccines, including scale-up towards GMP manufacturing with an H5 avian influenza antigen currently in preclinical evaluation.

We’re also working with leading domestic and international organizations, including the NIAID, NIH, the Scripps Research Institute, Oxford University, EuVac-Bio, AdaptVac, and the European Vaccine Hub, supporting a growing number of vaccine and antibody programs. These collaborations continue to generate an expanding body of data that not only validates the performance of our C1 platform across diverse targets, but also reinforces its scalability and broad applicability as we move toward product development and commercial execution. Within these efforts, we are advancing respiratory vaccine antigen programs, including ongoing RSV work with EuVac-Bio. Separately, we have initiated a new collaboration with the Scripps Research Institute focused on pre-fusion antigens and multivalent vaccine candidates, targeting RSV, human metapneumovirus, HMPV, and parainfluenza virus type three, PIV3. Early preclinical studies indicate that C1-produced RSV pre-fusion antigens perform comparably to mammalian-produced antigens while demonstrating potentially improved neutralizing antibody responses relative to insect cell production-based systems.

These respiratory indications represent a large global vaccine opportunity, where scalable manufacturing remains a key constraint. Our C1 platform is designed to address this through high-yield expression and efficient production of complex pre-fusion antigens, potentially enhancing efficacy while also improving cost efficiency and shortening overall development timelines. Overall, these collaborations continue to validate our C1 technology while building value through potential licensing, milestone payments, and royalties, which is incremental to our near-term product-driven revenue model. With that, now I’ll turn our call over to Chief Financial Officer Ping Rawson, who will walk through our full year 2025 financial results.

Ping Rawson, Chief Financial Officer, Dyadic International Inc.: Thank you, Mark. I will now go over our key financial results for the year ended December 31, 2025 in more detail. You can find additional information in our earnings press release and Form 10-K, which we filed earlier today. For the year ended December 31, 2025, total revenue was $3.09 million compared to $3.5 million in 2024. The decrease was primarily driven by lower R&D collaboration activity and a reduced license and milestone revenue, partially offset by $1.86 million increase in grant revenue from the Gates Foundation and CEPI. Cost of R&D revenue declined to $0.6 million compared to $1.2 million in 2024. Gates and the CEPI grant-related costs totaled $1.72 million in 2025 compared to 0 in 2024.

Internal R&D expenses increased modestly to $2.16 million in 2025 from $2.04 million in 2024, as we continued to invest in advancing our internal product pipeline towards commercialization. G&A expenses decreased to $5.76 million in 2025 from $6.13 million in 2024, driven by lower compensation and insurance costs. As a result, loss from operations was $7.19 million in 2025 compared to $5.9 million in the prior year. Net loss was $7.36 million or $0.23 per share compared to a net loss of $5.81 million or $0.20 per share in 2024.

We ended the year of 2025 with approximately $8.6 million in cash equivalents, restricted cash, and investment-grade securities. Our net cash used in operating activities was approximately $5.7 million in 2025. Looking ahead at 2026, we expect disciplined cash usage while prioritizing high-impact R&D programs and grant-funded activities. We also anticipate growth in product revenues across our life sciences and food and nutrition markets, driven by new product launches in cell culture media, while maintaining operating expenses generally in line with 2025 levels. Based on our current operating plan, we believe our existing cash resources provide a runway into 2027. However, we will continue to evaluate additional capital resources, including strategic partnerships and capital market activities, to further strengthen our balance sheet and support long-term growth. Next, I’d like to briefly address the rationale for establishing an ATM facility.

This is primarily about flexibility. The ATM gives us ability to access capital optimistically, depending on market conditions, pricing, and trading volume, rather than being forced into a larger, more diluted transaction. It is also a more efficient financial tool used by the majority of microcap biotech companies with lower costs, no roadshow, and less market disruption. Importantly, putting an ATM in place now allows us to be proactive and prepared if favorable market windows open. That said, this does not mean we will use it. The ATM simply provides optionality, and we will only access it if and when it makes sense. Overall, it is a common and flexible tool that complements other financing and partnership opportunities, and we intend to use it prudently with a focus on shareholder value. With that, I will now ask the operator to begin our Q&A session.

Each caller will be allowed one question and one follow-up question to provide all callers with an opportunity to participate. If time permits, the operator will allow additional questions from those who have already spoken. I will ask the operator to begin our Q&A session, after which Joe Hazelton will provide closing remarks. Operator?

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes to the line of Matt Hewitt with Craig-Hallum. Please proceed.

Matt Hewitt, Analyst, Craig-Hallum: Good afternoon. Thanks for taking the questions. Obviously a very successful start to the year, given the number of new partnerships and collaborations that you’ve announced. I’m just curious, as we think about some of these product launches, how should we be thinking about the timing and kind of how that the ramp of product revenues will progress over the course of this year, and quite frankly, more importantly, as we get into 2027 and 2028?

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: Hey, Matt, it’s Joe. It’s a great question, and it’s kind of a balance, right? It’s a balance of how much inventory do we try to produce versus what the current needs are in the market. Obviously, having a distribution agreement set up through IBT, and we’re pursuing others, we’re trying to balance the needs we have currently with the market expectations that we anticipate later this year. We do, you know, I guess, look at it as a slow ramp because the products do need to be into the market and qualified for use in the workflows that they’re being ordered for.

While some, you know, if it’s like a research type of a use, that’s usually a quicker pickup and a quicker conversion than something in the cell and gene therapy. It kind of depends on use case as well. Right now, it I would anticipate it’s kind of a slower start, but as these companies get used to the products and as they get into the market and get established in the workflows, you can see that significantly start to pick up. Obviously, our goal is to sign more distribution agreements, so we can have larger product volume opportunities rather than just with, you know, individual companies.

Matt Hewitt, Analyst, Craig-Hallum: Got it. On the license front, obviously, and you just noted this, that you’re looking to sign more collaborations. Do you anticipate that those collaborations, those new agreements, would incorporate some type of an upfront license fee? Or is it more important to get the correct distribution and having the agreement in place than necessarily getting upfront cash?

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: That’s another great question because I hate to give you this answer because I always hate when I get it, but it depends. It depends on the product.

it also depends on the market. In certain cases, like, you know, with alpha-lactalbumin, when we have existing strains that we have characterized at least to a certain extent, we do expect and drive for some upfront revenues. There are other markets that are a little more exploratory in the food and nutrition space or in the bio-industrial, maybe we don’t have a strain that already developed. In those cases, it may be dependent on, you know, how far along we are in the progress of the product. Typically, we try to push for larger upfront access fees when the products are further along in their development phase.

Those that are a little bit earlier in their development phase, a little more difficult because the customer has to fund additional work in which development, which makes them a little reticent to provide larger upfront fees. We’re trying to accelerate some of that through our own internal R&D development, like Transferrin. We are, you know, moving that through rather rapidly in terms of doing cell proliferation assays and other clinical validation, technical validation of the product that we feel will enable us to maintain or even drive some of those higher revenues. It’s every product is a little bit different. Every market is a little bit different. The further along we can take them, I mean, it’s the same thing in biopharmaceuticals, right? If you can get to phase I, the product’s worth more than preclinical. Phase II, it’s worth even more.

It’s similar in this. It’s just you can achieve those milestones a little quicker. Like, we can get them to clinical or to technical validation a lot faster in the research and diagnostic space than we can in, let’s just say, the GMP space.

Matt Hewitt, Analyst, Craig-Hallum: Got it. All right, thank you.

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: Thank you.

Operator: Thank you. Our next question comes from the line of John Vandermosten with Zacks. Please proceed.

John Vandermosten, Analyst, Zacks: Great. Thank you. You guys have announced several new expansions of existing agreements and new arrangements since the last quarter’s report. How are you making changes internally, I guess, to manage that, you know, with internal sales and marketing function?

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: John, first of all, another great question, and thanks for being on tonight. The key thing for us is the expansion of partnerships actually increases our own capabilities in some cases, like Fermbox. Fermbox has a dedicated business development team. They obviously have dedicated manufacturing. IBT, same thing. They have a designated sales team that supports their products across their distribution channels in the markets. We do every time we do a deal, we try to evaluate what other capabilities do these partners bring into the mix. Like I said, Fermbox expands our own capabilities. Then obviously something like IBT gives us additional, you know, kind of boots on the ground, which is important for us as well, ’cause obviously we don’t have that.

You have deals like with Proliant. Proliant, I don’t know if you’ve seen some of what they’ve been putting out, but they’ve done a very good job of putting a good data package around their recombinant albumin product, which is AlbuFree DX. As you can see, they have not only just a large media presence, but they also have a large infrastructure presence in terms of a global distribution and customer network that has now been engaged. All of our partners, we try to evaluate based on what else they can bring to the table, and how quickly they can help us commercialize and accelerate these products.

John Vandermosten, Analyst, Zacks: My next question is on pricing. How much control does Dyadic have over pricing with all of the various arrangements that you’ve signed? I guess I’m thinking of that in two ways. One is that you know, maybe these are just market prices and it’s you know, you take it or leave it. Then secondly, you know, perhaps how involved can you be in being competitive since you know, you have lower cost structure than some of the other products out there?

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: Another great question. In our partner programs, obviously, you know, we have some visibility, you know, in that process, but it is partner-led. In things like the distribution agreements, we obviously have built our margins in ahead of time. You know, regardless of what, you know, the product ends up being in the market for, we’ve already, you know, obviously made our money on that or made our revenues. Again, depending on the segment you’re looking at or the partner you’re looking at, in times we have more control, like through a distribution agreement or through, like, the growth factors that we were selling into. It also depends on the market.

When you know negotiating with cultured meat companies, they’re obviously much more price sensitive than someone looking at using our transferrin for you know cell culture media applications in cell and gene therapy. It we have flexibility in terms of the markets that we’re going into. We have greater flexibility with products that we control. But obviously in certain cases, like with albumin, it’s not as price sensitive of a market right now. It will be increasingly so, as every market you know ends up being. You know for the most part, they do tend to be market driven. The ones that we are able to control further are the ones that we have the greatest opportunity to improve our margins on. I don’t know, Mark, if you need

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: Yeah. Well, John, I think also that there’s a big drive in all these industries and these applications for animal-free proteins. As you can see from Proliant and the data, as Joe talked about, that they’re comparing the natural albumin to the albumin-free product that they’re putting out, and the data is quite compelling. You know, the regulatory agencies and these industries like pharmaceuticals, even food and nutrition, there’s a drive towards removing animal components both in the media and as the final product. We’re seeing a big push in that direction. In some of the strains that Joe talked about, we have very high productivity and a lot of margin to play with.

We’re not gonna give up margin if we don’t have to. You know, in the stonewash industry way back, you know, we made something for $1, sold it for $8. You know, obviously it became more competitive. As it did, we had the margins to reduce the price but still be competitive for the long term. I think those are the things that you need to think about. The general market in general, animal-free proteins is exploding on a worldwide basis.

John Vandermosten, Analyst, Zacks: Okay. Thank you, Joe. Thank you, Mark.

Operator: Thank you. Our next question comes to the line of Lewis Titterton, a private investor. Please proceed.

Lewis Titterton, Private Investor: Hi, guys. How are you?

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: Good. How are you?

Lewis Titterton, Private Investor: Good, good. This is probably an impossible question to answer. In your planning, in your financial planning, when do you think you might hit breakeven?

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: That is always the million-dollar question. You’re right, it’s not something I can answer. The short answer is, obviously, we wanna do it as quickly as possible, but we also have to be realistic and feasible in our approach. We don’t wanna make bad decisions that seem like maybe it can help us in the short term, but ultimately, you know, may not be in the best interest of the organization. I’ll give you an example of something like transferrin. Transferrin, we know is an extremely valuable product, right? While it, you know, if we did something rather drastic sooner, you know, we could bring in, you know, probably a nice chunk of money. It is not what’s best for the company in the long term.

The longer we can control these products, the better off we’re gonna be. The goal obviously is to be, you know, as revenue positive as quickly as possible. I think our products that we have give us the ability to do that. We just need more of them. We need to get them commercialized and into the system. You know, as you look out into the future, I can’t give you a definitive answer.

Lewis Titterton, Private Investor: No problem. Thank you very much. I appreciate it.

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: Absolutely.

Operator: Thank you. Our next question comes from the line of Tony Bowers with Intro-act. Please proceed.

Tony Bowers, Analyst, Intro-act: Hi, Joe. It’s probably difficult to know at this point what a sustained higher energy environment might mean. I can see it could make cultured food much more attractive versus farm-raised. Did you feel any buzz about that when you were at recent conferences? Then the second question for Mark on the biopharmaceutical program. It’s great that you’ve got so many people engaged now. If they get comfortable with the benchmarks, is the result that they just put this on the shelf and wait for a pandemic to hit? Or do you see opportunities to actually start making at least some seasonal vaccines?

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: I’m gonna let Joe go first, and then I’ll address your question.

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: Sure. It’s actually interesting you say that. There’s actually a lot of different factors that are pushing this drive in the food space, and not just energy, but obviously there’s a larger push on the regulatory and the consistency aspect. I think that’s probably the larger push, Tony, in that space, is there’s been greater variability in, let’s just say, naturally produced products than there has been previously. I don’t know whether that’s due to just, you know, differences in the process or if it’s that they’re trying to make too much too quickly. The biggest topic that was at this conference was really the regulatory scrutiny around plant and animal-derived products.

Because the FDA as well as other regulatory organizations are looking into how you’re extracting these resources from both animals and plants and the materials that go into it. There’s obviously an energy component to that, but there’s also a regulatory component in terms of safety. I think that’s probably the bigger one that I see moving the food nutrition category, as well as the ability to have specialized nutrition. You know, like you’re seeing in the biopharmaceutical space, they talk about individualized medicine. That’s now starting to be talked about in these, you know, alternative protein, you know, conferences as, you know, can we make things obviously specifically geared towards, you know, elderly patients with diabetes or, you know, children with certain, you know, genetic ailments. You know, it’s very interesting.

I think we’re still, you know, miles away from seeing those on the market, but we definitely do see a shift towards these more efficiently scalable non-animal proteins for these uses.

Tony Bowers, Analyst, Intro-act: Yeah. Good. Yeah, go ahead, Mark.

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: Well, I think if you think about it, alpha-lactalbumin and lactoferrin are made in such small amounts from milk. Even if you wanted to make it’s not affordable, it’s not accessible. Somehow it’s got to be made in an alternative manner if you wanna have infant formula with these nutritional benefits or in adult health drinks that we all ate, right? Those are great opportunities, whether the margins, if we can produce these at the right levels, at the right cost, you know, the gates are just wide open for applications. Now, it’s gonna take time from a regulatory perspective for some of those things, like an infant formula, you know, to get put on the market. As Joe pointed out, just like with Proliant, some of these partners we have, they’ve been in these industries for decades.

They have the application knowledge, experience, the market access. If we hit these things at the right yield and the right cost with Apoviss, you know, we’re right in the game. That hopefully addresses some of those issues. On the biopharmaceutical side, it’s not about just pandemic preparedness. People are now waking up and recognizing that, for example, the work we did with Uvax on the RSV and the pre-fusion, they have a better structure of the complexity of the antigen design. Same thing with Scripps, with their RSV, the HMPV, and the PIV3, the potential trivalent. You know, these things are huge needs out there in the world. You know, we can just get the funding to move those forward, not just with Scripps and these institutes, or it just.

You know, there are people out there that we’re talking to that potentially can fund some of these things. These are multi-billion-dollar opportunities. It’s not just about pandemics. The pandemics gave us the opportunity to get into humans to show safety, efficacy, and tolerability, you know, in the vaccine space or in the non-animal primate space. All these things, whether it’s Gates, Giuseppe, they’re opening the gates and the doorways to future products. It could be your shingles, it could be HPV. There’s all kinds of opportunities out there to drive these things forward. Those are all being funded independently. The same technologies and those benefits not only apply to pharma. We’ll be able to use some of that for Dapibus to make even a better production strain for higher productivity and vice versa on both sides of the equation.

Tony Bowers, Analyst, Intro-act: That’s great. A question for Ping on the recognition of grant. Is it straight line recognition or does it become a little bit more profitable at the end?

Ping Rawson, Chief Financial Officer, Dyadic International Inc.: It’s not a straight line, Tony. It’s basically based on the gap that we are recognizing the revenue as a percentage of the cost incurred for the entire project.

Tony Bowers, Analyst, Intro-act: Yeah.

Ping Rawson, Chief Financial Officer, Dyadic International Inc.: Basically it’s really a percentage of completion if you’re into how it’s calculated.

Tony Bowers, Analyst, Intro-act: Got it. Thank you.

Operator: Thank you. Our next question comes from the line of John Vandermosten with Zacks. Please proceed.

John Vandermosten, Analyst, Zacks: Thank you for taking another one. Joe, bigger picture, what’s the utilization rate right now for bio manufacturing in the United States? You know, I know it was tied a few years back and then with tariffs and onshoring, and probably some new builds as well. Has it changed materially?

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: You mean as far as capacity in the U.S. versus ex-U.S.?

John Vandermosten, Analyst, Zacks: Correct. Yes.

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: I think you’re right. I haven’t seen a drastic shift, but it is shifting. Not just the onshoring, but obviously, you know, the safety components and obviously tariffs and the political environment is driving some of that. Obviously not having to ship very expensive products worldwide is also attractive. You know, if you can make them here at home. You know, I mean, Proliant obviously is a great example, right? If they can manufacture here in the U.S., where they do their upstream, rather than somewhere else, you obviously lower your risk in terms of bringing that product into the country. I definitely have seen an uptick. There’s definitely a lot of new things going in.

We actually talked with a CDMO that isn’t even complete yet, that has a 3-year wait in terms of manufacturing capacity. I think the need is there. The question for me is gonna be, can we ever hit the true cost metrics to produce, you know, some of these GMP products here in the U.S. at the price point that these other countries that will need? Like if you’re producing it in the U.S., could you actually meet some of the cost metrics in Europe that you’re going to need to hit? That I don’t know. I don’t know if it’s gonna change whether or not. You know, the whole reason that there’s not a lot here today is just the cost.

You know, I don’t know if that’s going to really change just because we have more capacity. Hopefully it’ll drive, you know, the cost down, but I still don’t know. Do you have any thoughts on that?

Mark Emalfarb, Chief Executive Officer, Dyadic International Inc.: I think the efficiencies of a cell line that can pump out more product and yields can help drive the, let’s say, difference between the cost because it’s not labor intensive. With AI and all these process optimizations, it could get to the point where really in the U.S. you could produce things at very near the same cost you can overseas because you’re taking labor out. To be honest with you, I think that we’re heading in the right direction, not only from a government regulatory pursuing onshoring, you know, the supply chain. You know, one of the things that we deal with all the time, for example, with BARDA, you know, recently, and then there’s a couple of conferences coming up, is the supply chain disruption. You could see it again with oil, right?

Here now it’s constantly occurring and it’s rearing its head. It’s in the fertilizer, it’s in the oil, it was in the pandemic. People are realizing now that we have to have onshore capacity. Again, we’re global, so to be honest with you, we can pop our strain in India, it could be in China, it can be in Europe, it can be in South Africa, it can be in Bangladesh, it can be in America. With AI and automation, that difference is gonna just close the gap. We won’t have as far, let’s say, the gap that we’ve had in the last 20, 30 years with India and China. We’re gonna close that gap through innovation. That’s why people are looking at faster growing cell lines that can produce more for less with cheaper media.

John Vandermosten, Analyst, Zacks: Okay. Thank you.

Operator: Thank you. There are no further questions at this time. I’d like to pass the call over to Dyadic’s President and CEO, Joe Hazelton.

Joe Hazelton, President and Chief Operating Officer, Dyadic International Inc.: Thank you. As we close, I want to take a step back and put our progress into context. Over the past year, we’ve made a definitive transition from a development-focused organization to one that is now executing on commercialization. We’ve restructured the business, secured manufacturing, expanded our partner network, and most importantly, began launching products and generating early revenue across multiple channels. While our reported financials today still reflect that transition phase, the underlying business has changed meaningfully. We now have commercial products in the market, manufacturing and distribution in place, and a growing number of opportunities moving from sampling into qualification and toward repeat purchasing. Looking ahead, our focus is execution. We’re focused on scaling product sales and life sciences, advancing partner-led programs in food and nutrition, expanding our bioindustrial footprint through Fermbox, and continuing to leverage our platforms to create additional revenue opportunities.

As these efforts progress, we expect to see an increasing conversion into product sales, repeat orders, and a broader base of recurring revenue through 2026 and beyond. We believe the foundation is now in place, and our priority is to build on that foundation to deliver sustained revenue growth and long-term value creation. Thank you for your continued support, and we look forward to updating you on our progress.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines at this time.