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Date

Wednesday, March 25, 2026 at 5 p.m. ET

Call participants

  • President and Chief Operating Officer — Joseph P. Hazelton
  • Chief Executive Officer — Mark A. Emalfarb
  • Chief Financial Officer — Ping Wang Rawson

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Takeaways

  • Revenue -- $3.1 million in 2025, down from $3.5 million in 2024 due to lower R&D collaboration activity and reduced license and milestone revenue, partially offset by $1.9 million higher grant revenue from the Gates Foundation and SACI.
  • Cost of R&D revenue -- $600,000, a decline from $1.2 million reported in 2024.
  • Grant-linked R&D costs -- $1.7 million for Gates and SACI in 2025, up from zero in 2024, directly tied to increased grant activity.
  • Internal R&D expenses -- $2.2 million in 2025, compared to $2.0 million previously, with the increase supporting advancement of the internal product pipeline.
  • General and administrative expenses -- $5.8 million in 2025, down from $6.1 million in 2024, primarily from decreased compensation and insurance expenses.
  • Loss from operations -- $7.2 million in 2025 versus $5.9 million in 2024, reflecting pressure from increased grant-related costs and a revenue decrease.
  • Net loss -- $7.4 million, or $0.23 per share in 2025, compared to $5.8 million, or $0.20 per share in 2024.
  • Cash position -- Year-end cash, cash equivalents, restricted cash, and investment-grade securities were approximately $8.6 million.
  • Operating cash burn -- Net cash used in operating activities was approximately $5.7 million for 2025.
  • Commercial product launch -- Recombinant albumin, produced under the ProLiant Health and Biologics partnership, reached commercial launch in early 2026, establishing recurring revenue potential through a profit-sharing arrangement.
  • Distribution agreements -- An OEM distribution agreement with IVT BioServices facilitates global sales for animal-free recombinant DNase I and transferrin, accelerating market entry and positioning for volume growth.
  • First sales of growth factor -- Achieved initial sales of recombinant fibroblast growth factor (FGF) in 2025, validating technology and creating future revenue opportunities.
  • Bioindustrial expansion -- Collaboration with Fermbox Bio enabled commercial launch of recombinant RNase-free DNase I and large-scale N3xi enzyme sampling in Asia-Pacific markets, using a profit-sharing economic model.
  • Food and nutrition pipeline -- Agreement with RigBio targets development of animal-free recombinant bovine alpha-lactalbumin, including funded development, milestone payments, and future royalties.
  • Chymosin program -- Chymosin enzyme targeting cheese production, partnered with Incyte, moving toward a 2026 launch, with upfront access fees, milestone payments, and potential royalties.
  • Grant funding progress -- “approximately $2.4 million received to date under a $3.1 million grant.” in the active Gates Foundation collaboration.
  • ATM facility -- CFO Ping Wang Rawson said, “The ATM gives us the ability to access capital opportunistically, depending on market conditions, pricing, and trading volume, rather than being forced into a larger, more dilutive transaction.”
  • 2026 guidance -- Management expects disciplined cash usage, growth in product revenues for life sciences and food and nutrition, and operating expenses remaining generally consistent with 2025 levels.
  • Cash runway -- CFO Ping Wang Rawson stated existing cash “provide a runway into 2027.”
  • Commercialization strategy -- Multiple channels include direct product sales, profit-sharing, and global distribution agreements, with recurring revenue targeted in established and high-growth markets.
  • Manufacturing partnerships -- Partnerships, including with Fermbox Bio and ProLiant, deliver commercial-scale manufacturing, technical validation, and repeat purchasing opportunities, enabling capital-efficient scale-up.
  • Biopharmaceutical collaborations -- Active grant-funded work with Gates Foundation and CEPI continues, with C1 platform producing monoclonal antibodies and antigens shown to be “comparable to CHO-produced material.”
  • Product revenue ramp -- President Hazelton said the company anticipates a “slow ramp” for new product revenues as customers move from validation to routine workflow integration and repeat orders increase.

Summary

Dyadic International (DYAI 3.21%) reported a transition year as it moved from a platform development company to a commercial-stage biotechnology business. The company launched its first commercial products, secured profit-sharing and distribution agreements, and realized initial recurring revenue streams from recombinant protein sales. Strategic partnerships in life sciences, food and nutrition, and bioindustrial sectors advanced commercial scale and expanded global reach. Newly established capital tools and ongoing grant funding strengthened liquidity and created optionality for future growth. Management signaled expectations for increasing product revenue and sustained focus on capital discipline with near-term cash runway into 2027.

  • Ongoing collaborations with major organizations, including CEPI, the Gates Foundation, and The Scripps Research Institute, reinforced technology validation and opened additional licensing and milestone revenue paths.
  • OEM distribution and commercial manufacturing agreements leveraged partner infrastructure to accelerate commercialization across major bioprocessing, nutrition, and research markets.
  • The company’s ATM facility remains unused, positioned as a proactive measure for opportunistic financing without near-term dilution plans.
  • Expansion of recurring product channels and revenue model diversity positions Dyadic International for further penetration into large, established end markets through 2026 and beyond.

Industry glossary

  • C1 platform: Dyadic International’s engineered fungal expression system used for high-yield recombinant protein production across biopharmaceutical, life sciences, and industrial applications.
  • DAPBIS platform: Dyadic Applied Biosolutions integrated system for scalable, animal-free protein and enzyme development and manufacturing.
  • OEM distribution agreement: A commercial arrangement in which a distributor sells a company's proprietary products under its own brand, leveraging established global sales infrastructure.
  • Chymosin: An enzyme essential for the coagulation of milk proteins in cheese manufacturing.
  • Transferrin: A key protein used in serum-free cell culture media, vital for iron delivery and cellular growth support in therapeutic and cultivated meat production.

Full Conference Call Transcript

Joseph P. Hazelton: 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 International, Inc.’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 have made significant progress executing against that strategy. We have 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 partner Fermbox Bio partnership, and most importantly, we began moving products into the market. And I want to emphasize this point upfront.

Our reported revenues today still reflect the company in transition; the underlying business has clearly advanced towards commercialization. In less than one year, we have 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 platform. I want to 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 sources introduce variability and supply limitations; however, through our partnership with ProLiant Health and Biologics, we are now producing recombinant human albumin which was commercially launched in early 2026.

The Prolyte product, recombinantly produced using Dyadic International, Inc.’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 International, Inc. 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 International, Inc. platform-enabled product reaching commercial scale with recurring revenue potential driven by our partner’s 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 is widely used across biopharmaceutical manufacturing, cell and gene therapy, and cultivated meat.

We are 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. 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 IVT BioServices, enabling global sales of our animal-free recombinant products, such as DNase I and transferrin, through IVT’s established distribution channels. This accelerates market penetration while supporting both near-term revenue and positioning 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, biologic production, RNA workflows, and research and diagnostics. We have 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 are also advancing growth factors, specifically fibroblast growth factor, or FGF. FGF stimulates cell growth and is a key cost driver in cell culture systems, particularly in cultivated meat and advanced therapeutic applications.

In 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 multiproduct 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 follow-up and into scaled use, and we are 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 DAPBIS 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 RigBio 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 are 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 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, Incyte, targeting the 2026 launch. Chymosin is a key enzyme in cheese production, enabling the coagulation of milk proteins into curds. To date, we have 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 and Nutrition pipeline continues to expand across non-animal dairy proteins and food enzymes, supported by 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 Bioindustrial 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 N3xi, an enzyme cocktail produced using our DAPBIS platform that converts agricultural residues into fermentable sugars for biofuels and other industrial applications. Fermbox Bio 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 Bio 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 DAPBIS 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 nanomaterials. These markets are increasingly focused on efficiency and sustainability, where enzyme performance and cost profile are key drivers of adoption. We are 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 will now turn the call over to Mark A. Emalfarb, Dyadic International, Inc.’s CEO, to provide an update on these collaborations. Mark?

Mark A. Emalfarb: Thank you, Joe, and good evening, everyone. We continue to advance our partner-funded biopharmaceutical collaborations applying our 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 are 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 $2,400,000 received to date under a $3,100,000 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 Foundatione Biotechnologies Sienna, we are advancing recombinant vaccines, including scale-up towards GMP manufacturing, with an H5 avian influenza antigen currently in preclinical evaluation. We are also working with leading domestic and international organizations, including the NIAID, NIH, The Scripps Research Institute, Oxford University, UVAX Bio and NVAC, 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 the scalability and broad applicability as we move into our product development and commercial execution.

Within these efforts, we are advancing respiratory vaccine antigen programs, including ongoing RSV work with UVAX Bio, and separately, we have initiated a new collaboration with The Scripps Research Institute focused on prefusion antigens and multivalent vaccine candidates targeting RSV, human metapneumovirus (hMPV), and parainfluenza virus type 3 (PIV3). Early preclinical studies indicate that C1-produced RSV prefusion antigens performed 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 prefusion 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 will turn our call over to Chief Financial Officer, Ping Wang Rawson, who will walk through our full year 2025 financial results.

Ping Wang Rawson: Thank you, Mark. I will now go over our key financial results for the year ended 12/31/2025 in more detail. You can find additional information in our earnings press release and Form 10-Ks, which we filed earlier today. For the year ended 12/31/2025, total revenue was $3,090,000 compared to $3,500,000 in 2024. The decrease was primarily driven by lower R&D collaboration activity and reduced license and milestone revenue, partially offset by a $1,860,000 increase in grant revenue from the Gates Foundation and SACI. Cost of R&D revenue declined to $600,000 compared to $1,200,000 in 2024. Gates and SACI grant-related costs totaled $1,720,000 in 2025 compared to $0 in 2024.

Internal R&D expenses increased modestly to $2,160,000 in 2025 from $2,040,000 in 2024 as we continue to invest in advancing our internal product pipeline towards commercialization. G&A expenses decreased to $5,760,000 in 2025 from $6,130,000 in 2024, driven by lower compensation and insurance costs. As a result, loss from operations was $7,190,000 in 2025 compared to $5,900,000 in the prior year. Net loss was $7,360,000, or $0.23 per share, compared to a net loss of $5,810,000, or $0.20 per share, in 2024. We ended the year of 2025 with approximately $8,600,000 in cash, cash equivalents, restricted cash, and investment-grade securities. Our net cash used in operating activities was approximately $5,700,000 in 2025.

Looking ahead to 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 would like to briefly address the rationale for establishing an ATM facility. This is primarily about flexibility.

The ATM gives us the ability to access capital opportunistically, depending on market conditions, pricing, and trading volume, rather than being forced into a larger, more dilutive transaction. It is also a more efficient financial tool used by the majority of micro-cap biotech companies with lower cost, narrower risk, 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. After which, Joseph P. Hazelton will provide closing remarks. Operator?

Operator: Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Matt Hewitt with Craig-Hallum. Please proceed.

Matt Hewitt: Obviously, a very successful start to the year given the number of new partnerships and collaborations that you have announced. I am just curious, as we think about some of these product launches, how should we be thinking about the timing and kind of how 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.

Joseph P. Hazelton: Hey, Matt. It is a great question. And it is kind of a balance, right? It is a balance of how much inventory we try to produce versus what the current needs are in the market. Obviously, having distribution agreements set up through IVT, and we are pursuing others, we are trying to balance the needs we have currently with the market expectations that we anticipate later this year. So we do look at it as a slow ramp because the products need to be in the market and qualified for use in the workflows that they are being ordered for.

While some, if it is a research type of use, that is usually a quicker pickup and a quicker conversion than something in the cell and gene therapy space. So it kind of depends on use case as well. Right now, I would anticipate it is 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. And obviously, our goal is to sign more distribution agreements, so we can have larger product volume opportunities rather than just with individual companies.

Matt Hewitt: Got it. And on the license front, obviously, and you just noted this that you are 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.

Joseph P. Hazelton: That is another great question because I hate to give this answer because I always hate when I get it, but it depends. It depends on the product, and it also depends on the market. In certain cases, 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 nutrition space or in the bioindustrial space where maybe we do not have a strain already developed. In those cases, it may be dependent on how far along we are in the progress of the product.

But 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 the development phase are a little more difficult because the customer has to fund additional work in development, which makes them a little reticent to provide larger upfront fees. We are trying to accelerate some of that through our own internal R&D development, like transferrin. We are moving that through rather rapidly in terms of doing cell proliferation assays and other technical validation of the product that we feel will enable us to maintain or even drive some of those higher revenues. But every product is a little bit different.

Every market is a little bit different. The further along we can take them— I mean, it is the same thing in biopharmaceuticals, right? If you get to Phase 1, the product is worth more than preclinical. Phase 2, it is worth even more. It is similar in this; it is just you can achieve those milestones a little quicker. We can get them to technical validation a lot faster in the research and diagnostic space than we can with, say, the GMP space.

Matt Hewitt: Got it. All right. Thank you.

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

John D. Vandermosten: Great. Thank you. So 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 with internal sales and marketing function?

Joseph P. Hazelton: John, first of all, another great question and thanks for being on tonight. The key thing for us is that the expansion of partnerships actually increases our own capabilities in some cases. Like Fermbox Bio—Fermbox Bio has a dedicated business development team. They obviously have dedicated manufacturing. IVT, same thing. They have a designated sales team that supports their products across their distribution channels in the markets.

So every time we do a deal, we do try to evaluate what other capabilities these partners bring into the mix, and like I said, Fermbox Bio expands our own capabilities, and then obviously, something like IVT gives us additional kind of boots on the ground, which is important for us as well because we do not have that. And then you have deals like with ProLiant. ProLiant, and I do not know if you have seen some of what they have been putting out, but they have done a very good job of putting a good data package around their recombinant albumin product, which is Albufree DX.

And as you can see, they have not only 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. So 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 D. Vandermosten: My next question is on pricing. How much control does Dyadic International, Inc. have over pricing with all of the various arrangements that you signed? And I guess I am thinking of that in two ways. One is that maybe these are just market prices and it is take it or leave it. And then secondly, you know, perhaps how competitive you can be since, you know, you have a lower cost structure than some of the other products out there?

Joseph P. Hazelton: Another great question. In our partner programs, obviously, we have some visibility into that process, but it is partner-led. But in things like the distribution agreements, we obviously build our margins in ahead of time. So regardless of what the product ends up being in the market for, we have already made our money on that and made our revenue. So again, depending on the segment we are looking at or the partner you are looking at, at times we have more control, like through a distribution agreement or through, like, the growth factors that we are selling into, but it also depends on the market.

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

Mark A. Emalfarb: Yes. Well, John, think also that there is a big drive in all these industries and these applications for animal-free proteins. And as you can see from ProLiant and the data, as Joe talked about, they are comparing the natural albumin to the animal-free product that they are putting out, and the data is quite compelling. So, you know, the regulatory agencies and these industries like pharmaceuticals, even food and nutrition, there is a drive towards removing animal components both in the media and as the final product. So we are seeing a big push in that direction. And in some of the strains, as Joe talked about, we have very hyper-productivity and a lot of margin to play with.

But we are not going to give up margin if we do not have to. In the snow wash industry way back, we made something for $1, sold it for $8, and obviously it became more competitive as it did. We had the margin to reduce the price but still be competitive for the long term. So I think those are the things that you need to think about. And the general market in general, animal-free proteins is exploding on a worldwide basis.

John D. Vandermosten: Okay. Thank you, Joe. Thank you, Mark.

Operator: Our next question comes from the line of Louis Titterton, a private investor. Please proceed.

Louis Titterton: Hi guys, how are you? This is probably an impossible question to answer, but in your planning, your financial planning, when do you think you might hit breakeven?

Joseph P. Hazelton: Good. How are you? That is always the million-dollar question. And you are right, it is not something I can answer definitively. The short answer is obviously we want to do it as quickly as possible. But we also have to be realistic and feasible in our approach. We do not want to make bad decisions that seem like maybe they can help us in the short term, but ultimately may not be in the best interest of the organization. And I will give an example of something like transferrin. Transferrin, we know it is an extremely valuable product.

And while if we did something rather drastic sooner, we could bring in probably a nice chunk of money, it is not what is best for the company in the long term. The longer we continue to control these products, the better off we are going to be. But the goal, obviously, is to be as revenue positive as quickly as possible. And I think the 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.

But as you look out into the future, I do not think it is going to be an extremely long time, but I cannot give you a definitive answer.

Louis Titterton: No problem. Thank you very much. Appreciate it. Thank you.

Operator: Our next question comes from the line of Tony Bowers with IntroAct. Please proceed.

Tony Bowers: Hi, Joe. It is 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. But do you feel any buzz about that when you were at recent conferences? And then the second question for Mark. On the biopharmaceutical programs—great that you have 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? I am going to let Joe go first, and then I will address your question.

Joseph P. Hazelton: Sure. Sure. So it is actually interesting you say that, but there are actually a lot of different factors that are pushing this drive in the food space and not just energy. But obviously there is a larger push on the regulatory and the consistency aspect. I think that is probably the larger push, Tony, in that space. There has been greater variability in, just say, naturally produced products than there has been previously. And I do not know whether that is due to differences in the process or if it is that they are trying to make too much too quickly.

But 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 are extracting these resources from both animals and plants and the materials that go into it. So there is obviously an energy component to that, but there is also a regulatory component in terms of safety. And I think that is probably the bigger one that I see moving the Food and Nutrition category, as well as the ability to have specialized nutrition.

So similar to what you are seeing in the biopharmaceutical space, where they talk about individualized medicine, that is now starting to be talked about in these alternative protein conferences: can we make things specifically geared towards elderly patients with diabetes or children with certain genetic ailments. It is very interesting. I think we are still 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.

Mark A. Emalfarb: Yes, good. Yes, that is— go ahead. I think if you think about it, alpha-lactalbumin and lactoferrin are made in such small amounts from milk. So even if you wanted to make it, it is not affordable. It is not accessible. And so somehow it has to be made in an alternative manner if you want to have infant formula with the nutritional benefits or an adult health drink since we all age, right? So those are great opportunities where the margins—if we can produce these at the right levels at the right cost with DAPBIS—are just wide open for applications.

Now it is going to take time from a regulatory perspective for some of those things like an infant formula to get put on the market. But as Joe pointed out, just like with ProLiant and so many partners we have, they have been in these industries for decades. They have the application knowledge, experience, and market access. So if we hit these things at the right yield and right cost with DAPBIS, we are right in the game. So hopefully that addresses some of those issues. On the biopharmaceutical side, it is 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 prefusion— they have a better structure of the complexity of the antigen design. Same thing with Scripps with the other RSV, the hMPV, and the PIV3 potential trivalent. These things are huge needs out there in the world. And if we can just get the funding to move those forward, not just with Scripps and these institutes— it is just that there are people out there that we are talking to that potentially can fund, seeing these as multibillion-dollar opportunities. So it is not just about pandemic.

The pandemic gave us the opportunity to get into humans to show safety, efficacy, and tolerability in the vaccine space, or in the non-human primate space. So all these things, whether it is Gates, CEPI, they are opening the gates and the doorways to future products. It could be your shingles, it could be HPV, there are all kinds of opportunities out there to drive these things forward. And those are all being funded independently. And the same technologies and those benefits not only apply to pharma; we will be able to use some of that for DAPBIS to make even a better production strain for higher productivity and vice versa on both sides of the equation.

Tony Bowers: That is great. Question for Ping on the recognition of grant revenue. Is it straight-line recognition or does it become a little bit more profitable at the end?

Ping Wang Rawson: It is not a straight line, Tony. It is basically based on GAAP that we are recognizing the revenue as a percentage of the cost incurred for the entire project. So, basically, it is really a percentage of completion if you are into how it is calculated?

Tony Bowers: Got it. Thank you.

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

John D. Vandermosten: So Joe, bigger picture, what is the utilization rate right now for manufacturing in the United States? And I know it was tight a few years back and then with tariffs and onshoring, and probably some new builds as well, has it changed materially?

Joseph P. Hazelton: As far as capacity in the U.S. versus ex-U.S.?

John D. Vandermosten: Correct. Yes.

Joseph P. Hazelton: I think you are right. I have not seen a drastic shift, but it is shifting. Not just the onshoring, but obviously the safety components and tariffs and the political environment are driving some of that. But obviously not having to ship very expensive products worldwide is also attractive. And if you can make them here at home—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. So I definitely have seen an uptick. There are definitely a lot of new things going in.

We actually talked with a CDMO that is not even complete yet, but has a three-year wait in terms of manufacturing capacity. So I think the need is there. The question for me is going to be, can we ever hit true cost metrics to produce some of these GMP products here in the U.S. at the price point that these other countries—like if you are producing it in the U.S., could you actually meet some of the cost metrics in Europe that you are going to need to hit? And that, I do not know.

I do not know if it is going to change whether or not the whole reason that there is not a lot here today is just the cost. And I do not know if that is going to really change just because we have more capacity. Hopefully, it will drive the cost down, but I still do not know. Mark, do you have any thoughts on—

Mark A. Emalfarb: Well, I think the efficiencies with a cell line that can pump out more product and yields can help drive the, let us say, difference between the costs because it is not labor intensive. And with AI and all these process optimizations, we 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 are taking labor out. So to be honest with you, I think that we are heading in the right direction. Not only from a government regulatory perspective pushing onshoring the supply chain.

And one of the things that we deal with all the time, for example with BARDA recently, and there are a couple of conferences coming up, is the supply chain disruption. It was just not— I mean, you could see it with oil, right? Now it is constantly occurring, and it is rearing its head. It is in the fertilizer, it is in the oil. It was in the pandemic. So people are realizing now that we have to have onshore capacity. Again, we are global.

To be honest with you, we can pop our strain in India, it could be China, it could be Europe, it could be in South Africa, it could be in Bangladesh, it could be in America. But with AI and automation, that difference is going to just close the gap. So we will not have, say, the gap that we have had in the last 20, 30 years with India and China. We are going to close that gap through innovation. That is why people are looking at faster-growing cell lines; they can produce more for less, with cheaper media.

John D. Vandermosten: Okay. Thank you.

Operator: Thank you. There are no further questions at this time. I would like to pass the call over to Dyadic International, Inc.’s President and COO, Joseph P. Hazelton.

Joseph P. Hazelton: Thank you. As we close, I want to take a step back and put our progress into context. Over the past year, we have made a definitive transition from a development-focused organization to one that is now executing on commercialization. We have 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 are focused on scaling product sales in life sciences, advancing partner-led programs in food and nutrition, expanding our bioindustrial footprint through Fermbox Bio, and continuing to leverage our platforms to create additional revenue opportunities. As these efforts progress, we expect to see increasing conversion and 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.