Dyadic International, Inc. Stock

Good day, and welcome to the iAcess Alpha Virtual Best Ideas Fall Investment Conference 2026. Our next presenting company is Dyadic Applied Biosolutions. [Operator Instructions]

I'd now like to turn the floor over to today's host, Joe Hazelton, President and COO at Dyadic Applied Biosolutions. Please go ahead.

Thank you, and thank you, everyone, for joining us today. Again, my name is Joe Hazelton. I'm the President and Chief Operating Officer for Dyadic Applied Biosolutions. And I spent about the last 30 years in biopharmaceutical commercialization and development before 3 years ago joining Dyadic to help with the commercialization of their platform technology across 3 core areas: life sciences; food nutrition; and Bioindustrial. And what I'm really excited about is we're now at the commercial stage. So we've transitioned from a true R&D organization into a commercial organization with multiple products either on the market or in current commercialization using our gene expression technology.

Now we're going to -- wait for the slide -- oh, there we go. So I'm going to be making, obviously, certain forward-looking statements. Please refer to our risk profiles and our SEC documents found on our website. And let's talk about why Dyadic is exciting right now, and it's really because of the growth and the demand for proteins worldwide, specifically animal-free solutions. So as we look, the global demand for protein is growing across all 3 of our key segments: life sciences; food and nutrition; and bioindustrial for multiple different reasons. Not only from a food and nutrition standpoint, we have a growing population. In the life sciences, companies are looking for safer, more reliable alternatives to animal or plant-derived proteins. And when you use recombinant or nonanimal solutions, you can have broader applications for these proteins than you do with animal or plant-derived sources. And that's where Dyadic really has the opportunity to be transformational in terms of what it can offer for real-world applications across our 3 core segments. And we currently have products, both ourselves and our partners that are addressing specific protein needs in each of those sectors. As that demand continues to grow, we hope to be able to provide solutions to take advantage of it.

Now why Dyadic and why now? What makes us an attractive investment opportunity? Well, it's because we've actually moved to the commercialization and execution stage. So when we sold our industrial business to DuPont in 2015, we embarked on transitioning or developing the host technology to create more valuable products. It takes time to do that. It takes time to essentially reengineer the cell lines to move from bioindustrial to life sciences or food and nutrition. So now that we've done that, we've shifted our focus to products that don't require human clinical trials. They don't require FDA review and not that biopharmaceuticals is not going to be a key value driver for us in the future, but in the short -- and in the mid and short term, it really is about products that can be put on the market and sold without regulatory review and without FDA review or human clinical trials. These are products that we currently have available like albumin, transferrin, growth factors in our cell culture media portfolio. We have other products such as alpha-lactalbumin and chymosin has just launched in the food and nutrition space. And we also have products we'll talk about later in the bioindustrial. But we're at that commercial inflection point, both to ourselves, our partners and our distributors, we're ensuring the global market access for the products that we're launching. We've got multiple revenue models in place, both direct sales. We have licensing and milestone revenues as well as partnerships and profit sharing. And we have strategic partners to help us pull this through and commercialize, and that's going to continue to expand. So we're really at the inflection point where we actually have products on the market, and that's the biggest change from Dyadic even a year ago, but let alone 5 years ago. We've actually completed the transition to commercial execution. And we're doing that by using our proprietary gene expression technology, which we named C1 and our sister platform, which is Dapibus. We have 2 platforms which enables us to target multiple segments of each of our core verticals in life sciences, food and nutrition and bioindustrial. And even though we're going to talk about a lot of different products, a lot of different markets, what we do remains the same. We engineer our filamentous fungal platform to produce the proteins of interest for our markets, and those are our customers. And then we obviously engineer and scale that platform into commercialization. The 2 platforms that we have, C1 and Dapibus. C1 is more our life sciences and biopharma platform. It's been specifically engineered to produce more complex proteins like human therapeutics, monoclonal antibodies, vaccine antigens, where our Dapibus platform has been specifically designed to be optimized for high-yield, low-cost production in food and nutrition or bioindustrial applications. So we're taking the industrial heritage that we had, and now we're applying it to more high-value areas. And now we've got 2 platforms that help us capture value across our portfolios. But again, we're doing the same thing for each project. We're engineering our technology to produce the protein. So even though we talk about a lot of different markets, we're really a solutions provider. We're using our technology to provide solutions across multiple end markets. But on a daily basis, what we do is the same. So it's not really -- it's not like we're focused on a thousand different things. We're doing the same thing just in multiple different markets.

What's also shifted is our ability to generate revenue. So we currently have a partnership with Integrated BioTherapeutics where we are selling our products directly into the market. Now these are research-grade products in cell culture, molecular biology reagents, things like growth factors transferrin, alpha-lactalbumin. These are things that are currently being sold through our partnership with IBT, and we're also selling them directly to large and third parties. Those sales are just starting. We just launched these products into the -- or we've just got them into the market, and now we're starting to see some initial sales coming in.

We also have licensing and milestone revenues coming in from our partner, Inzymes and other partners, where we've already received about $1.4 million in upfront and milestones from the launch of their bovine chymosin, which is now currently on the market and generating commercial sales. And then we have partnership revenues like with Proliant Health & Biologics (sic) [ Biologicals ]. They're our partner for recombinant human albumin. They launched in March of this year, and they're currently also developing 2 additional recombinant human albumin products that they announced about 2 months ago, they'll be launching not just in the research space, but also in the cell and gene therapy market as well as in the cell culture market. So they will have 3 different versions of recombinant human albumin in the market and we receive a share of the profits. We have partners like Fermbox Bio. We also have a profit share for products that they're launching in the bioindustrial space, and then we have royalties from Inzymes and BRIG BIO as they commercialize alpha-lactalbumin. So we have multiple ways now that we've been able to diversify our revenue streams so that we can shorten the time to our ability to generate revenues. We can sell products directly. We still have retained the ability to license and have profit sharing with other partners as well. It's a capital-light strategy because we're selling products that are relatively easy to bring to the market in the research grade space. And for those that require more development or more resources to launch, we're using a partner-driven approach like we've done with Inzymes and Proliant.

The markets that we're targeting are life sciences, food, and nutrition and Bioindustrial. And within each of those, we've drilled down into submarkets where we feel that our technology has a specific advantage. And most of that being that we can produce complex proteins, but with the horsepower of an industrial -- the industrial heritage that we have. So when you look at the life sciences segment, when you look at human therapeutics, reagents, buffers, input proteins, this is an $80 billion to $100 billion segment. We're focusing in on cell culture media and molecular biology reagents. And it gives us an addressable market of about $10 billion. So these are products that are used in the production of therapeutics. They're used in research development as well as discovery. They're used for cell and gene therapy. They're used to -- they're used for input proteins to make monoclonal antibodies with mammalian cell lines. These are proteins that are used every day in research, development, diagnostics and manufacturing of products. And it's a key market where the regulatory environment is such that they're looking for a more sustainable higher quality, higher purity and repeatability in their proteins. And that's what recombinant expression does, and we're able to do these in larger amounts, lower cost than some of the competing platforms out there.

In the food and nutrition space, again, when you look at different markets across alternative proteins, you're looking -- the nonanimal dairy market is a significant opportunity as we move forward. And you just take a trip to the grocery store and you're seeing all these different types of milk, whether it's soy milk, oat milk, now there's going to be animal free milk, which, again, is using proteins that are expressed in these gene expression technologies where we're able to produce whey proteins like alpha-lactalbumin. And those are markets where, again, our technology has a competitive advantage because you're competing with animal-derived sources or you're competing with plant-derived sources, which are relatively inexpensive versus recombinant production, which is why you need a host that's been designed to produce proteins in large amounts and at low cost, and that's exactly where Dyadic started its industrial businesses. And again, that's what we're using. We're using those industrially proven techniques and platform capabilities to apply to these segments that are competing in more margin sensitive areas. And then we look back in the bio industrial segment. We obviously were very successful in that in the past. And now we're reentering it, but in markets that we know very well or we're exploring niche or specialty opportunities where we believe that our ability to express complex proteins or enzymes like hyaluronidase could be beneficial in key areas like cosmetics. We're also in biofuels. We've launched EN3ZYME, which is a biomass processing cellulosic enzyme with Fermbox early this year, and we're already starting to see some initial sales there. And again, as we start to expand into this market, we're not trying to boil the ocean of Bioindustrial, which is $150 billion segment. We're focusing in on the areas where we know we have competitive advantages or experience or areas where we believe there's a specialty opportunity.

In the near term, the majority of our near-term revenues, we feel are going to come from life sciences, whether that's from direct sales, licensing, milestones and royalties as well as profit sharing, the majority of our near-term revenues are going to come from this life sciences space. And again, we've got multiple products that are now currently in the market. We have things like DNase I which is a molecular biology reagent used to cleave DNA. So it's essentially needed in cell and gene therapy. You needed to make mRNA vaccines. You use it in diagnostics as well as even cleaning medical equipment to remove DNA. That's -- it's a very highly utilized agent. And again, one of the things that we're able to produce at some pretty good margin and unit economics. And then you look at cell culture media, in order for things like CHO cells or other cell line, [indiscernible] cell lines to run, they need products to grow mammalian cells. And that's what transferrin, growth factors, albumin, that's what they do. They're cell culture applications, but they're also used as stabilizing agents or coating medical equipment. Each one of these has multiple end uses. And in the research segment, where we're currently starting to launch these products, we're starting to see that our proteins are generating good data. And now we have a global distribution capability through IBT, and they've now launched 6 products being made in our platform, and they're currently available and they're currently selling. So the sales process in the life sciences space is a little bit longer. You do -- after we do -- in order to get a supply agreement, they do have to test to make sure that it works in the application like if they're using transferrin cell culture or they're using it in biochemical assays. They need to make sure that it works. And once they've done the testing, obviously, then they feel comfortable using it and incorporating it into their production or into their general businesses. So it does take maybe 3 to 4 months in order for them to get through that process. But once you're ingrained, it creates recurring demand over the years. And that's what we're looking for is to again, get in through the research segment. And as people get comfortable with the products, they'll start to use them in these higher-value applications like cell culture and cell and gene therapy. So we're really trying to create that lasting value in a market that is really growing with the demand for these high-value proteins, but for -- from nonanimal solutions.

I just want to target -- I just want to give one example of, again, why I think that is a great investment opportunity. We have the capability to make things like hyaluronidase. And hyaluronidase is it's a key biopharmaceutical drug delivery agent. It's also used in cosmetics. It's a high-value product class that has been the -- essentially the building block for companies like Halozyme and Alteogen, and they've done obviously extremely well with one singular product, hyaluronidase. And we believe we now have 2 different strains that we're able to make hyaluronidase, and one is a human glycan strain, so it's more humanized, and one has native glycan structure. What it does is it gives us the capability to potentially target both the biopharmaceutical industry as well as the aesthetic medicine industry. And again, we think that our technology, because of our capability to glycoengineer the products as well as the high productivity, high expression levels that we see with our platforms, we believe that we can have the manufacturing economics that makes hyaluronidase attractive. And those are the types of opportunities that we're just -- they're not being valued right now for us. We need to move them a little further along in the commercialization process, but it shows you what's possible with a singular product, just hyaluronidase, again, obviously, you need to put a lot of data around it, but it can support entire companies in terms of its value proposition.

We're also looking at other markets like food and nutrition and bioindustrial for growth. And again, these take a little more time because the manufacturing and the unit economics are much more margin sensitive in areas like non-animal dairy or alternative proteins and bioindustrial. So we use a partner-driven approach. So that, again, we're using partners that understand the space, that understand how to commercialize in these areas, people like BRIG BIO or people like Inzymes. Inzymes has already launched bovine chymosin. They're now getting ready to launch a second chymosin or camel chymosin into the dairy enzyme market, and it's used for cheese applications. And then we have partners like BRIG BIO that are funding the development of our bovine alpha-lactalbumin strain for the food and nutrition market. And these are guys that have been in the precision fermentation industry at large dairy companies, and now they've gone out on their own to bring these precision fermented products to market, and we've partnered with these types of groups to be able to quickly develop production strengths to produce the targets of interest. And along the way, currently selling bovine alpha-lactalbumin as a research-grade product. So we're able to generate revenues today from the strain that we have while also preparing for the future through a partner-driven approach. It's capital light. These do require significant investment to launch in a food and nutrition space. But again, we have great opportunity and great partners.

In the bioindustrial segment, we've partnered with Fermbox Bio. We have our first launch of EN3ZYME, which again is for biomass processing, and we have a profit sharing on the back end with them. And we're also developing other industrial enzymes earlier this year. We announced that we are making a pulp and paper enzyme, an area that we've done traditionally well in the past. And we're starting to look at others like hyaluronidase for other markets in the bioindustrial space where we can add value. So these, again, are areas where we're looking for partners can help us with -- these are large-scale manufacturing projects. We're talking about literally metric tons of products that need to be manufactured for these markets. And that's why we use a more partner-driven approach in these areas.

As you look to the future, 2025 was about building the pipeline and getting these products ready to launch. '26 is the launch year. Now we have, again, 6 products are listed on IBT's website. They're currently selling those into the market. We're selling products directly and these are things like DNase I. We have human albumin that's been launched by Proliant and now they're getting ready to launch additional versions of recombinant human albumin. We have human transferrin that we have initial pilot sales and we have lots of sampling and testing going on in the market. We also have human growth factors that are currently being sold in the market, and bovine alpha-lactalbumin as well as a human alpha-lactalbumin are being used in the research segment. So we have a lot -- some cross-category application for some of these, so we're able to monetize them, not just in life sciences, but also in things like food and nutrition. And in food and nutrition, we're developing additional protein enzymes like lactoferrin. It's a high-value protein in the food and nutrition space in non-animal dairy. It also is used for cell culture media supplementation and life sciences. So again, multiple revenue opportunities from the same strain, and that's again how we look to get multiples out of each product. And again, we've partnership model where we're looking for bovine alpha-lactalbumin to start generating revenues from research-grade sales. and ultimately from food and nutrition sales in the future. And then the bioindustrial space, again, we're already launched, and we're getting ready to target additional pulp and paper markets as well as some specialty markets with things like hyaluronidase. So we've got a very diversified product portfolio. But again, what we're doing is the same. We're basically engineering the strains to produce these proteins of interest. And now we're looking at what's next. So we continue to refill that pipeline as we start to expand and launch these products into the market, both through ourselves and through our partners.

We're not going to walk away from biopharmaceuticals, and I want to make that point. We do believe that the C1 platform will be transformational in its ability to make low-cost human therapeutics. And we do have several significant partners like the Gates Foundation or CEPI or the Fondazione Biotecnopolo di Siena. We're also part of the European Vaccine Hub where C1 is part of their discovery pillar, where they're looking for new vaccines and antibodies to treat world conditions. And we do believe that's going to continue to create strategic value for us, and continue to validate platform for human use. We've completed a Phase I study. So we know the C1 platform can be used to make human therapeutics. What we need -- the next step is for this to be taken through a Phase III clinical program and ultimately into a product that's approved by a recognized regulatory health authority like the FDA or the EMA. And that's what our partners are helping us do right now. Obviously, we're a small micro cap company. We don't have the capability or the resources right now to bring these fully across the goal line, but the partners we have do have that kind of capability and they have those types of partnerships in place. And the markets are absolutely massive. If you look at just one monoclonal antibody in a -- even in a disease area like malaria, you could be talking about a couple of hundred million dollar product right there, if not more. And then you have, obviously, oncology agents and other vaccines for RSV that we're developing or even Ebola that we're looking at with Scripps as well. So we have lots of partnerships that will continue to not just be nondilutive to us, but also create strategic value and long-term upside.

And that takes me to my last slide, which is -- this is our path forward. We are talking about launching products, expanding our position within the market, both through our own product sales as well as through our partnered product sales or partner distribution and supply agreements to create value for our shareholders. And we're finally at that stage where we're starting to generate. I know that the initial sales are small, but again, it's taken a little longer than we anticipated, but we finally have products in the market. DNase I is available today. We have growth factors available today, transferrin is available today, and we're starting to leverage that in our partner relationships as well as with our supply agreements. And then we have our partners like Proliant, Inzymes, Fermbox that are now launching products into the space as well as another group of partners like BRIG BIO and others that are developing products in these other markets to essentially commercialize. So we have a lot of opportunities. And the beauty of having a platform technology is that you can address and create solutions for multiple end products. So we have multiple third-party projects for proprietary proteins and enzymes of third-party that they want to use our platform to do that. They want to use our platform in order to make their products and commercialize them. So we believe that's going to build long-term value while retaining that capability in biopharmaceuticals that, again, over time, we do believe will add significant value to the organization.

So I'm going to stop right there, and I want to thank everyone for their time today, and thank you for listening to me, and we'll pause here now for Q&A. And I will pull up the Q&A.

All right. Okay. So first question, when might we start seeing a meaningful ramp in product sales?

And yes, that is the absolute right question and one that I'm waiting for every day. It's going to take a little bit of time. And it's simply because we didn't have the resources to create significant inventory and just flood the market and try to create a bunch of, I guess, paper sales. Essentially, we're [ creating ] to demand right now. So the initial ramp is slow, but we have a lot of sampling. We have initial pilot sales and not just in life sciences, we're also seeing we're selling transferrin into the cultured meat segment. In food and nutrition, we're selling growth factors into the cultured meat segment. So we're starting to see these start to ramp. Again, when it becomes meaningful, we hope that's going to be in early 2027, we start to see a bigger bump in sales as we start to get some more supply agreements done, but that's really the goal as we start to see a significant increase in our own product sales and also as well as our partners. Obviously, Proliant is now launched in March, so they're almost 4 months into the launch, and they're getting ready to bring additional products into the market. So again, we're looking for big things over the next 12 to 24 months.

So the next question is, the biggest commercial milestones investors should watch for over the next 12 months?

From a commercial milestone standpoint, we do have commercial milestones from some of our contracts that we currently have in place. But really, it's about product opportunities and partnerships that we're currently working on. Those are the ones that I would be watching for. Now that we've commercialized these products and they're available on the market, it changes the discussion and it changes the people that we're having discussions with because now we are talking to larger suppliers, larger distributors that are looking for better solutions for some of these nonanimal recombinant proteins and enzymes. And we happen to have a very highly productive system that can produce these products at better unit economics. So it really is the partnerships, the licensing as well as the product sales. Those are the milestones we should be looking at.

What products appear closest to generating meaningful commercial revenue today?

That one is very easy to answer. Albumin, transferrin as well as growth factors. And those are the 3 right now that I think will generate the most meaningful commercial revenue today. One, because we have a great partner in Proliant. They're one of the largest providers of serum-derived albumin in the world, and this is their first non-animal solution. They have a global customer base, a global distribution network. So we obviously hope to see good things. Transferrin is a market right now that's underserved. There is a significant need out there for human transferrin and bovine transferrin. We're already seeing pretty solid uptake in the cultured meat segment. They're testing it. It's working well in application. It's growing these animal muscle cell lines. So we anticipate as these products start to get approved by different regulatory agencies, the uptake is going to improve as well. So I think those are some of the key things.

I know we only have a minute left here. This is a great question. What do you think investors most misunderstand about Dyadic today?

I think -- what I think people missed the most is we've made a transition. Now up until a year ago, when I took over a little over a year ago now, when I took over as President, we were focused on research development grants, things that essentially we're trying to move our biopharmaceutical platform forward. And those biopharmaceutical programs take time. Even if you're successful in the biopharmaceuticals segment, let's just say we had a monoclonal antibody and someone was going to take it forward to Phase I, II, III and then ultimately through approval, that's a 12-month process. That is a long time -- or I'm sorry, that's a 5- to 7-year process followed by a 12-month regulatory review. And that's on a -- that's a best case scenario. And I think what's been misunderstood is how are we going to make money today? And we now have products that have been commercialized. I think that's what people are missing is that we do have products in the market. Yes, I realize the ramp is not really what we want. We want to obviously to grow faster, and that is a focus of ours. But I think that's the biggest thing is that we actually have commercial products. We've now have proven once again we can use this platform to create commercially relevant products, both through ourselves as well as our partners. And now we have Integrated BioTherapeutics. If you go on their website, you'll see products that are being made in our platform. And again, you go to the Proliant's website, you're going to see that they're selling AlbuFree DX and more to come on the other 2 new products that they're going to be launching. And that's what I think people are missing. These products are out there. I get -- they're not generating millions of dollars today, but they're in the market and they're starting to grow. And that's what I think people are misunderstanding. We're using our technology not to make products that are going to be approved in 5 to 7 years, they're approved today, and they're on the market today being sold.

And I think I'm just out of time, and I want to thank everyone, and really appreciate the questions. And I'm always here if anyone has others.

That concludes the Dyadic Applied Biosolutions presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.

Good evening. Welcome to Dyadic International's Q2 2026 conference call. Currently, all participants are in the listen-only mode. Following management's prepared remarks, there will be a brief question-and-answer session. As a reminder, this conference call is being recorded today, August 12, 2026. I would now like to turn the call over to Ms. Ping Rawson, Dyadic's Chief Financial Officer. Please go ahead. Thank you.

Thank you. Good evening and welcome everyone to the second quarter of the Diadics' conference call. I hope you have had the opportunity to review Dyadic's press releases announcing financial results for the quarter ended June 30, 2026. You may access our release and form 10Q under the investor session of the company's website at dyadic.com. On today's call, our President and Chief Operating Officer, Dr. Joe Hazleton will review our Q2 2026 business and corporate highlights and provide commentary on the strategic direction of the business. Our CEO, Mark Innesbar, will provide an update on our biopharmaceutical program, and I will follow with a review of our financial results in more detail, after which we will hold a brief question and answer 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 experienced. or implied by these forward-looking statements.

Diatics 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 the addict's report filed with the SEC. It is now my pleasure to pass the call to our President and COO, Joe Hazelton. Joe? Thanks, Peng, and thank you everyone for joining us today.

Last quarter, we talked about dyadic moving from a platform development story toward a commercially driven business. In Q2, that transition became more tangible. We're shipping products, supporting customer evaluations, generating initial sales, and expanding distribution. We're also improving manufacturing economics and using that commercial activity to create broader opportunities for partnerships and licensing. At the same time, we are expanding and accelerating both our internal product pipeline and third-party product development opportunities. That distinction is important. In our markets, commercialization is rarely a single event. It typically progresses from technical validation to sampling, customer qualification, initial purchasing, and if the product performs, and the economics work to repeat in potentially larger volume orders.

During Q2 and after quarter end, we saw a growing number of diet products move further along that continuum. A good example of improving manufacturing economics to accelerate the potential for commercial launch is our animal-free recombinant human transfer program. During the quarter, our initial pilot scale run increased productivity by approximately 80%. Based on our current preliminary biomanufacturing assumptions, that improvement is expected to reduce costs by approximately 40%. We've now sampled the product into research and cell culture applications in addition to the recombinant bovine transfer in progress into cultivated meat that we've discussed previously. That matters for several reasons. Lower manufacturing cost improves our commercial flexibility while supporting attractive product economics and maintaining a strong quality profile. Higher productivity improves the scalability and supply profile customers evaluate before qualifying a critical media component.

And importantly, these improvements provide another data point in which we can demonstrate to prospective partners evaluating whether our protein production platforms can manufacture proteins in greater quantities, efficiently and economically. This is the commercial model we're building. We improved the strain and process, use those improvements to support product sales and customer qualification, and then use the resulting performance data to strengthen the case for larger strategic collaborations, licensing arrangements, or technology access opportunities. The value of an 80% productivity improvement is not limited to transfer in itself. It also helps validate the broader platforms. We are seeing similar progress across our Lifescience portfolio. During Q2, we began product shipments to IBT Bioservices under our OEM distribution agreement, and completed additional shipments after quarter end for research diagnostic and cell culture applications.

We also generated initial pilot sales of recombinant transfer and growth factors for cultivated meat applications. These sales remain early, but they potentially put dyadic produced proteins into customer workflows where performance, consistency, supply and economics can be evaluated under real operating conditions. Our distribution strategy is intentionally capital efficient. Rather than build a large direct commercial organization for every market, we're combining selective direct sales with distributors and OEM partners that already have customer relationships, application expertise, and global reach. That gives us multiple ways to reach the market while keeping our fixed commercial infrastructure relatively lean and selectively launching our own products. Pro-initialization of AlbuFree DX recombinant human albumin for life science and diagnostic applications and has announced plans to broaden the portfolio with AlbuFree TX for cell culture and AlbuFree CGT for cell and gene therapy applications. Successful commercialization under our arrangement could provide data with better results. potential future royalty participation, while an established partner leads market development and customer adoption.

We're also seeing commercial validation in food and nutrition through enzymes. Their non-animal bovine chymosin produced using DyDoc technology is now generating commercial sales. This represents a partner taking a product developed with our platform through development and into the market where it is being sold commercially. A second product is also in development, creating the potential for an additional milestone and future royalty economics. With Firmbox Bio, commercialization has expanded around recombinant DNase 1 and recombinant human and bovine transfer. Taken together, these relationships demonstrate the different stages of the commercial cycle, from product development and distribution to initial purchasing and actual commercial sales. And they create multiple potential revenue pathways for VADIC through direct sales, partner sales, milestones, royalties, development funding, and licensing.

We also initiated scale-up activities with Brig Bio for recombinant bovine alpha-lacta albumin under a fully funded development agreement. Additional product testing is underway to evaluate comparability to animal-produced proteins. This is another example of how we're advancing products toward broader commercial applications while working with partners to support development and scale-up. Importantly, the strain being developed for this program is not limited to a single end market. We're also using it to produce research-grade material for reagent and cell culture applications. That cross-category strategy gives us additional commercial options earlier in the development cycle. Protein ultimately intended for a larger nutrition market may also be introduced into research, reagent or cell culture channels where volumes, qualification requirements and commercialization timelines differ.

This can provide earlier market validation and early revenue opportunities while the broader food and nutrition program advances. It also allows us to leverage the same development work across multiple markets. When we create a high-performing strain, optimize the process, and develop the analytical package, we look for opportunities to deploy those capabilities through direct sales, distribution, funded development, licensing, or broader collaborations. After quarter end, we also expanded our precision fermented dairy protein portfolio through an additional development and commercialization agreement. We're following the same playbook in bioindustrial, where we're building a portfolio around scalable enzyme production. In July, we announced a new proprietary industrial cellulase products, specifically engineered for advanced fiber modification applications. The program builds on the commercialization of Enthrezine and is designed for applications that can include pulp biorefining, microcrystalline cellulose, and nanocellulose production with the potential to improve fiber strength and retention, reduce processing energy requirements, and increase usable fiber output and overall process efficiency.

In addition to the commercial launch of Enzymes non-animal chymosin and FermVox BIOs N3-zyme, this new cellulase program further demonstrates the potential of Dapabas as a repeatable product development and manufacturing platform across multiple enzyme classes and end markets. Rather than relying on different production organisms for different products, DAPA-BIS is built around the common microbial production strains and shared development infrastructure, which can help streamline strain development, process optimization, scale up in manufacturing as additional products move through the pipeline. As our programs advance through optimization, pilot scale production, and customer evaluation, we expect to evaluate multiple commercialization paths, including direct product sales, strategic collaborations, contract manufacturing, and technology licensing. When you look across life sciences, food and nutrition, and bio-industrial, the model is becoming increasingly consistent. We now have products moving through qualification and distribution, products generating initial sales, and partner developed products already being sold commercially. At the same time, we're improving manufacturing productivity and costs, and expanding the number of applications and markets our proteins and enzymes potentially can address. We use that commercial and technical validation to strengthen both the economics of individual products and the strategic value of the underlying platforms.

That's why we view the commercial traction and strategic business development as complementary. We believe that the combination improves our ability to build recurring product revenue while also increasing the potential value of licensing and broader strategic collaborations. Importantly, the benefits are not limited to one platform or market. We're increasingly able to leverage learnings and technology advances across C1 and Dapabisc, including our proprietary combinatorial libraries and the rapid plasma to protein development capabilities advanced through the fully funded biopharmaceutical program. That work has demonstrated the ability in certain programs to move from plasma to purified protein in approximately 15 days. We believe applying these capabilities across our shared technology foundation can help improve development speed, expression yields, manufacturing economics, and time to commercialization across life sciences, food and nutrition, bioindustrial, and biopharmaceutical opportunities. With that, I will now turn the call over to Mark to discuss our biopharmaceutical programs, including how the data and capabilities being generated there can further strengthen C1 and potentially create additional strategic value across the app.

Mark?.

Thank you, Joe. Joe described how commercial products are helping validate our platforms across life sciences, food and nutrition, and bioindustrial markets. Our biopharmaceutical programs are doing something similar at the more regulated end of the protein spectrum. The programs are generating data related to the production of monoclonal antibodies, vaccine antigens, and other therapeutic proteins that we believe can strengthen the broader value proposition of C1 as a manufacturing platform. Our strategy in biopharma remains partner-funded and capital efficient. We're not trying to build a fully integrated pharmaceutical company or independently fund large clinical programs. Instead we were working with organizations such as the Gates Foundation, CEPI Foundation, the biotechnologies, Kiana or FES. the EU Vaccine Hub, Scripps Research, NIAID supports collaborations, the Israel Institute for Biological Research, and several others that can help evaluate C1 against demanding technical benchmarks. Our Gates Foundation-supported collaboration is funded under an approximately $3.9 million grant program. focused on developing potentially lower cost monoclonal antibodies targeting respiratory syndical virus malaria.

C1-produced antibodies have demonstrated high productivity and functional characteristics comparable to established mammalian cell reference materials. Funding is in place to continue this work, and we are working toward providing C1-produced material to support initiation of preclinical studies with one or both antibodies. Each step toward more advanced evaluation provides additional evidence around C1's ability to manufacture complex biologics with the productivity, quality, and functionality in comparison to legacy platforms that biopharmaceutical developers evaluate when considering the adoption of an innovative production platform such as C1. We're also continuing our CEPI-supported collaboration through FBS, under which Dyadic is eligible to receive up to approximately $2.4 million to support recombinant vaccine development and scale-up activities. A key capability demonstrated through this work is speed. C1 has shown the ability to progress from plasmid to purified protein antigen in approximately 15 days. We subsequently applied this rapid workflow to two scripts designed Gundevugio Ebola virus antigens, providing a real-world demonstration of the C1 platform's ability to approximate the virus. 15-day plasmid to purified protein capability.

Both antigens have been delivered to Scripps Research and FBS and are now undergoing further characterization with the potential to support future preclinical evaluation. What is particularly important about that result is what the workflow demonstrates. Rapid strain development, efficiency creation of the target protein, streamlined process execution, and delivery of purified material in a highly compressed timeline. Speed can be especially important in pandemic preparedness. But these same capabilities can also create value more broadly for development timelines, Manufacturing simplicity, scalability, and cost of goods influence product development and commercialization decisions. Ms. This is where our biopharma work connects back to the broader business Joe discussed. Working on technically demanding antibodies and vaccine antigens expands our know-how in strain engineering, expression, secretion, purification, and scale-up.

Every protein is different, but the capabilities and technical learnings generated through these programs can and are potentially informing development work across our broader portfolio. Beyond Gates and CEPI, we are advancing the NIAID-supported preclinical evaluation of C1-produced malaria antigens, continuing monoclonal antibody development with the Israel Institute for Biological Research, and pursuing additional potential antibody programs through the European Vaccines Hub. and FBS ecosystem, as well as the opportunities with prospective first-time C1 collaborators. Collectively, these programs are broadening the external data set around C1 across many different protein classes and applications. believe a growing body of evidence continues to support additional funded development programs and create opportunities for potential platform licensing, technology access, milestone royalties, manufacturing relationships, and broader strategic collaborations. Taking together with the commercial progress Joe described, we believe Diag is building a more balanced business. return product revenue opportunities across our commercial segments. supported by externally funded biopharmaceutical programs that can generate technical validation and potentially create longer-term licensing and strategic value. With that, I will turn the call back to Ping for the financial review.

Thank you, Mark. I will now go over our key financial results for the second quarter of 2026 in more detail. You can find additional information in our earnings pressure lease and form 10-Q, which we filed earlier today. Total revenue for the three months ended June 30, 2026 was approximately $961,000, essentially flat compared to approximately $967,000 for the second quarter of 2025. Revenue for the quarter included approximately $124,000 of research and development revenue and $837,000 of grant revenue, primarily associated with our ongoing externally funded programs. For the first six months of 2026, total revenue increased approximately 52% to $2.1 million compared to approximately $1.4 million for the same period in 2025. Total cost of revenue for the quarter was approximately $984,000, an increase of 60% compared to approximately $614,000 for the second quarter of 2025. The increase was primarily related to higher activity levels associated with our grant-funded programs.

Internal research and development expenses decreased 47% year over year to approximately $333,000 compared to approximately $629,000 in the second quarter of 2025. The decrease reflects our continuous focus on advancing programs through externally funded collaborations and maintaining disciplined internal R&D spending. For the six months, internal research and development expenses were approximately $809,000, down 28% from approximately $1.1 million a year ago. DNA expenses increased by $253,000 or 18% year over year to approximately $1.7 million compared to approximately $1.4 million in the second quarter of 2025. The increase was primarily driven by higher rebranding and business development expenses of $323,000 and the higher legal and accounting expenses of $116,000, partially offset by lower share-based compensation expenses of $196,000 and the lower incentives compensation of $32,000. For the six months, G&A expenses were approximately $3.4 million and an increase of 14% year over year. Lost from operations for the quarter was approximately $2.1 million compared to approximately $1.7 million in the prior year period. net loss for the quarter was approximately $2.1 million or $0.06 per share, compared to approximately $1.8 million or $0.06 per share for the second quarter of 2025.

For the six months ended June 30, 2026, net loss was approximately 4.1 million or 11 cents per share compared to approximately 3.8 million or 13 cents per share for the first six months of 2025. Turning to our balance sheet and liquidity, we ended the second quarter with approximately $4.8 million in cash, cash equivalent, which is about $1.5 million. restricted cash and investment-grade securities including crude interest. As disclosed in our Form 10-Q, based on our current liquidity position and the accounting requirements for evaluating liquidity over the 12 months following the issuance of our financial statements, concluded that there's substantial doubts about our ability to continue as a going concern and there's the applicable accounting standard AIC 205-3. I want to briefly put that disclosure into context and be clear about what that means and what it does not mean. Going Concern is a required accounting assessment based on whether our current resources, together with financing and other actions that are considered probable, are sufficient to fund our obligations over the required assessment period. This is a required accounting determination regarding the 12-month look-forward period from the financial statement issuing state. It does not mean that the company is seizing operations, and it does not reflect any default under our convertible notes or any other obligations of the company.

We were in compliance with all our covenants under our convertible notes, and those notes do not mature until December 31, 2027. Rather, the conclusion reflects our need to obtain additional capital as we continue executing our commercialization and development strategy. We are actively evaluating a range of financing alternatives and other opportunities to strengthen our balance sheet. Importantly, those opportunities are not limited to traditional equity financing. We are also pursuing potential non-diluted and strategic source of capital, including new and expanded licensing arrangements, upfront and milestone payments, royalties, funded development programs, products and technology partnerships, and other strategic transactions that could provide capital also our technologies. At the same time, we remain focused on discipline cash management, expanding commercial revenues, and maximizing the use of third-party funding and strategic collaborations to support development activities. Our objective is to increasingly fund product development through a combination of commercial revenues, partner-funded programs, and other non-diluted sources, thereby reducing the amount of capital Dyadic must deploy internally as the business expands.

As Joe and Mark discussed, we are beginning to see increasing commercial activity across our life sciences, food and nutrition, and bioindustrial programs, alongside the continued external funding and validation of our biopharmaceutical programs. While these activities remain at a relatively early stage, we believe they are creating a growing number of opportunities to generate recurring product revenues, licensing income, royalties, milestones, and other partnership revenues. Our broader objective is not simply to increase revenue, but to build a business model in which a growing portion of product development and commercialization can be supported by customers, licensees, strategic partners, and external funding sources. If successful, we believe this approach can help extend our financial resources, reduce our reliance on diluted capital, and allow us to continue advancing a broader portfolio of commercial and strategic opportunities while carefully managing operating expenses and capital requirements. 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. time permits, the operator will allow additional questions from those who have already spoken. I will now ask the operator to begin our Q&A session, after which Joe Hazleton will provide closing remarks.

Operator?.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment, please, while we pull for questions. And the first question comes from the line of Matt Hewitt with Craig Hellam Capital Group. Please proceed.

Good afternoon. Thanks for taking the questions. Maybe first up, I think both in your queue as well as in your prepared remarks, you noted fairly significant ordering activity post-closing the Q2 books. I'm just curious, should we anticipate that we're going to see product revenues here in the third quarter? And if so, what does that ramp kind of look like? Or do you anticipate it'll be lumpy here over the first few quarters?.

Craig, it's a great question. Yes, lumping would probably be the best way to describe it. What we did in the second quarter, we started to fill the channels. We obviously ship products to our first global distributor, IBT. We also have direct product sales or initial pilot sales going into cultured meat and a couple into the research segment as well. But it's too early until we have some recurring orders to really figure out what that ramp is going to look like. Obviously, we're having discussions every day. So again, we're always trying to push the ramp as quickly as possible, but I think it's just right now it's a little too early.

But the good news is we also have our partners in the market like ProLiant, who's not only launched, you know, Albu for EBX, but now they're looking to launch two additional, you know, products into the market. We have Enzymes and Firmbox as well. So our hope is obviously between our product sales as well as our partners that we'll continue to build that ramp as quickly as possible.

Got it. And then maybe my follow up. You know, you have a lot of irons in the fire, several different products that you're working on different partnerships that you've inked and others that are coming. How are you prioritizing all of those? And or is it, you know, just basically moving down the list and knocking them all off at the same time. Thank you.

That one's a lot easier. Revenue. It's all prioritized based on the amount of revenue that we can generate in the shortest amount of time. So when we're looking at whether it's a potential direct sale, whether it's a licensing opportunity, it's based on the size of the potential opportunity. And we're going to continue to execute that way.

And the next question comes from the line of John Vandermosten with ZACS. Please proceed.

Great, thank you, and good evening, Joe, Ping, and Mark. It seems like you mentioned a lot of product shipments in the press release, and I'm hoping you can share with me what the intermediate steps are between shipment and then dyadic top line.

It first depends on what the shipment is. So we had some shipments to direct customers, which is obviously direct sale. We also had shipments to distributors. So that is again, shipped to the distributor, gets into the channel, sell process, and then you also have people like ProLiant. When ProLiant sells, obviously we get money, but that's on the channel. on the back end as well. So the main thing is we need to get product into the channels. We're able to get six different product opportunities into commercial distribution with IBT in addition to some of our direct sales.

So now we need to ramp that up. We're also exploring obviously other distribution opportunities. And I think that's, to me, that's the important point is in order for us to grow we need to get that product into the market and we also have our customers that are doing the same thing. Enzymes already has commercial sales so our hope obviously is that as those start to ramp as well we'll start to see those come in.

Okay. And I wanted to get a sense of, you know, I know you guys aren't providing guidance, but you did mention in the queue about the enzymes milestone that's expected. What other cash flows, I guess, could we expect in the second half to get a sense of, you know, kind of where cash might stand at the end of the year?.

Any help you could give me on that? Yes, I think, you know, on both the industrial biotech side, through biochemicals, there's some new things going on where we're engaging with some people that are very interested in using the Dapabase platform, not only to develop enzymes, but for bio-based chemicals. And we've got some work that we've actually done in there that we'll be talking about maybe in Q3. But also on the pharmaceutical side, you know, the data is coming in very well as we talked about the Gates Foundation and the MADS, both RSV and malaria are advancing, and the data that we're seeing from the human glycosylation, the yields, the quality as we head into these preclinical studies potentially will actually continue to drive interest there, along with CEPI. You know, that 15-day plasmid to protein is applicable not only in pharma, but also, as Joe pointed out, it's going to help accelerate the development and commercialization of some of our, you know, food and nutrition. life science, and industrial applications. And then we're in discussions with a couple of major suppliers and pharmaceutical companies where we're hoping to land one of those big chunks of cash to to bring us like non-dilutive capital that could last us, you know, from, you know, several months to several years depending on what it comes out I mean if you keep in mind John we did bring in 30 million dollars of non dilutive capital on the industrial side and not exclusive licenses in the past and so between what Joe's got going on on that side and some of the new opportunities there and And on the pharmaceutical side, one of those checks could really, really make a huge difference. And as Joe said, those are things we're focused on, getting that done.

Okay. All right. Thanks, Mark. Thank you. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. We'll pause and couple moments. There are no further questions at this time and this will conclude the question and answer session. I will now turn the call over to Dyadic's President and COO, Joe Hazelton.

Thank you. As we close, I want to bring together what Mark and I discussed today. We believe Q2 represents another important step in Dyadic's evolution from primarily developing technology platforms to building a commercially driven business around those platforms. Across life sciences, food nutrition, and bio-industrial markets, products are progressing through qualification and distribution into initial and commercial sales. At the same time, we continue to improve our C1 and DAPABIS platforms in manufacturing, productivity, and economics, while applying relevant technology advances and learnings across both platforms. This shared technology foundation is helping us expand applications, accelerate product development, and work with strategic partners to broaden our commercial reach. On the biopharmaceutical side, externally funded programs are generating important data around complex proteins, including monoclonal antibodies and vaccine antigens that we believe can strengthen C1's value proposition and support future licensing and strategic opportunities. What connects these activities is our ability to turn technical performance, performance into commercial opportunity.

Better productivity and economics can drive product adoption, while customer traction and external validation can strengthen the opportunity for broader strategic relationships. We still have significant execution ahead of us, but we believe that it has more ways to create value today than it did a year ago. We have commercial products, expanding distribution, improving manufacturing economics, partner funded programs, and a growing body of external validation. Our focus for the remainder of 2026 is to continue converting that product into product sales, recurring revenue, and larger strategic and licensing opportunities while scaling the business efficiently. We appreciate the continued support of our shareholders, partners, and employees. We look forward to updating you on our progress and thank you for joining the call today.

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

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good evening, and welcome to Dyadic International's Q1 2026 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, May 13, 2026.

I would now like to turn the call over to Ms. Ping Rawson, Dyadic's Chief Financial Officer. Please go ahead.

Thank you, operator. Good evening, and welcome, everyone, to Dyadic's First Quarter 2026 Conference Call. I hope you have had the opportunity to review Dyadic's press releases announcing financial results for the quarter ended March 31, 2026. You may access our release and Form 10-Q 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 Q1 2026 business and corporate highlights and provide commentary on the strategic direction of the business. Our CEO, Mark Emalfarb, will provide an update on our biopharmaceutical products, and I will follow with a review of our financial results in more detail, after which we will 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 reports filed with the SEC.

It is now my pleasure to pass the call to our President and COO, Joe Hazelton. Joe?

Thanks, Ping, and thank you, everyone, for joining us today. As we recently held our full year 2025 earnings call, today, we want to build on the updates we provided in March by focusing on the continued operational and commercial progress we're making across the business and why we believe Dyadic is increasingly well positioned for the future.

Over the last several years, we have worked to transform Dyadic from a platform technology company into a commercially focused biotechnology company capable of generating recurring revenues from products, partnerships, licensing opportunities and strategic collaborations. While we're still in the early stages of that transition, we believe the progress made during 2025 and into 2026 demonstrates that the business today is materially different than it was even a year ago. Importantly, products enabled by our microbial production platforms are now entering commercial channels. We have products launched, products being shipped, products being sampled by customers and products beginning to generate revenues through direct sales, OEM distribution, milestone payments, profit-sharing arrangements and strategic partnerships.

For investors, the key point is that Dyadic is building multiple potential paths to revenue creation rather than relying on a single product or market opportunity. A strong example is Proliant Health & Biologics' commercial launch of Albufree Dx recombinant human albumin produced using Dyadic's platform technology. Dyadic is eligible to receive a share of the profits from product sales. We believe the significance of this launch extends beyond the economics themselves. It demonstrates that the established industry participants are willing to commercialize products produced using our technology platform and bring them into commercial channels.

Similarly, Inzymes has now commercialized recombinant non-animal bovine chymosin after successfully achieving developmental milestones. This is another important validation point for our technology and commercialization models. As additional partners bring products to market, we believe awareness and interest in our platforms will continue to increase. Since these launches and partnership announcements, we've seen growing inbound interest from potential partners, distributors and customers evaluating our technology for additional proteins and enzymes across life sciences, food and nutrition and industrial applications.

Our strategy is around -- centered around leveraging our proprietary C1 and Dapibus microbial production platforms to produce animal-free proteins and enzymes for large and growing global markets where scalability, manufacturing economics, supply chain reliability and sustainability matter. We believe our technology is particularly well suited for these markets because the many products we target require stable manufacturing, competitive economics and consistent quality. Traditional production systems can be expensive, difficult to scale or dependent on animal-derived inputs. Our platforms are designed to address those challenges while enabling partners and customers to move toward more sustainable and animal-free solutions.

In life sciences, we are focused on recombinant proteins and enzymes used in cell culture media, diagnostics, molecular biology and bioprocessing applications. These are attractive markets because many products are consumables that generate recurring demand once qualified into customer workflows. For example, recombinant transferrin is used in serum-free and animal-free cell culture media and support cell growth and viability. Demand for transferrin can scale alongside growth in cultivated meat, biologics manufacturing and advanced cell culture applications.

During the quarter, we continued to expand customer engagement around recombinant bovine transferrin and received initial purchase orders within the cultivated meat segment. While still early, we believe this is an important indicator of market adoption. These markets typically develop through a progression of evaluation, sampling, qualification, initial purchasing and ultimately repeat ordering as customer production scales. We also continue to advance recombinant growth factors and additional cell culture components designed to support broader transition towards animal-free media systems.

Another important milestone was our OEM distribution agreement with IBT Bioservices. Through this relationship, IBT will commercialize Dyadic recombinant products, including DNase-1 and transferrin through its established global distribution channels. We believe this is strategically important because it expands market reach while allowing Dyadic to remain capital efficient. DNase-1 represents another example of how we intend to commercialize products across multiple channels. Together with Fermbox Bio, we commercially launched recombinant animal origin-free DNase-1 earlier this year, and DNase-1 is broadly used in molecular biology, diagnostics and bioprocessing workflows.

In Food and Nutrition, we remain focused on large global markets where animal-free proteins may provide functional sustainability and supply chain advantages. Our agreement with BRIG BIO for development of recombinant bovine alpha-lactalbumin is an example of this strategy. Alpha-lactalbumin is a key whey protein with applications in infant nutrition, medical nutrition and functional food products. Under the agreement, development work is underway, including product optimization and application testing with customer sampling currently expected to begin in mid-2026.

We're also continuing development activities for recombinant human lactoferrin, another high-value functional protein with applications across nutrition and wellness markets. Importantly, we're prioritizing opportunities where our platforms can address markets that are both large and recurring. We believe this creates the potential for long-term value creation as customers increasingly seek scalable, animal-free and cost-effective production alternatives.

In bioindustrial markets, our partnership with Fermbox Bio continues to advance manufacturing scale-up and commercialization activities across multiple products. Fermbox provides an efficient pathway to manufacturing capacity and commercial scale without requiring Dyadic to build significant internal infrastructure. Their EN3ZYME product produced using our Dapibus technology previously fulfilled its first large-scale commercial order and continues expanded sampling activity into additional geographic markets, including Asia Pacific.

Across all these initiatives, our commercial strategy remains disciplined and focused. We're emphasizing larger strategic partnerships, leveraging established commercial channels where possible, expanding direct product opportunities selectively and maintaining careful expense management while we continue building the business. We also recognize that investors remain focused on financial performance and stock price, and we understand that Dyadic is still viewed by many as a company in transition. However, we believe the operational progress we made over the last year meaningfully differentiates the business today from where it has been historically.

Importantly, this evolution also represents a return to Dyadic's roots. Prior to focusing on biotechnology platform development, Dyadic successfully developed, manufactured and commercialized industrial enzymes globally. Today, we're leveraging the technologies and intellectual property developed over the past decades to build a product-driven business focused on recombinant proteins and enzymes across life sciences, food and nutrition and industrial markets. We now have products commercially launched, product shipments underway, initial purchase orders, established distribution relationships, manufacturing partners and multiple opportunities to build recurring product revenues through direct sales, licensing milestones and strategic collaborations.

While we recognize that investors ultimately want to see sustained revenue growth and broader commercial adoption, we believe the underlying foundation of the business continues to strengthen. We now have multiple products commercialized or entering commercial channels, a growing partner network, increasing manufacturing capabilities, expanding geographic reach and a broader set of opportunities to generate future revenues. We believe where Dyadic is heading today is significantly stronger than where the company has been historically, and we remain focused on executing that transition responsibly, efficiently and methodically.

With that, I'm going to turn the call over to Mark to discuss our biopharmaceutical programs and broader strategic implications for our technology platform. Mark?

Thank you, Joe. While Dyadic's primary commercial focus remains on non-pharmaceutical markets, our biopharmaceutical activities continue to play an important strategic role by validating the capabilities of the C1 platform, generating non-dilutive funding and creating potential future licensing and partnership opportunities.

Our approach in biopharma remains disciplined, capital efficient and partner-driven. Rather than independently funding large clinical development programs, we are collaborating with government agencies, global health organizations, academic institutions and industry partners that recognize the potential advantages of flexible and scalable biologic manufacturing technologies. Through collaborations with organizations, including the Gates Foundation and CEPI in collaboration with Fondazione Biotecnopolo di Siena, we continue advancing programs involving monoclonal antibodies and recombinant vaccine antigens while generating additional data, supporting the scalability, flexibility and manufacturing advantages of the C1 platform.

Our Gates Foundation supported collaboration funded under an approximately $3 million grant program continues advancing low-cost monoclonal antibodies targeting RSV and malaria with ongoing studies demonstrating comparability between certain C1 produced monoclonal antibodies and CHO-derived antibodies, the current industry standard. We also continue advancing activities under the CEPI supported collaboration through Fondazione Biotecnopolo di Siena, where Dyadic is eligible to receive up to approximately $2.4 million to support recombinant vaccine development, scale up, supporting future manufacturing capabilities and speed to market. Importantly, these programs continue generating data supporting the ability of the C1 platform to rapidly develop and scale complex recombinant proteins, including monoclonal antibodies and vaccine antigens.

Beyond these programs, we remain engaged across a broader portfolio of government-supported and partner-funded initiatives involving respiratory viruses, malaria, MERS, rabies and as evidenced by recent events, additional emerging infectious disease applications. Importantly, these collaborations continue expanding the body of data supporting the versatility of the C1 platform across multiple protein classes and therapeutic targets, while also positioning Dyadic for potential future licensing opportunities, milestone payments, royalties, technology access agreements, strategic partnerships and manufacturing relationships.

At the same time, we are beginning to see meaningful commercialization progress across our non-pharmaceutical businesses through product launches, initial customer orders, commercial shipments, manufacturing partnerships, distribution relationships and expanding business development activities involving recombinant animal-free proteins and enzymes. We believe these commercial activities not only create potential revenue opportunities, but help validate the scalability and broader applicability of our underlying production platforms. Taken together, we believe Dyadic is continuing to build a diversified opportunity set that combines near-term commercial product opportunities with longer-term strategic platform value.

With that, I'll turn the call back over to Ping to review the financial results for the quarter.

Thank you, Mark. I will now go over our key financial results for the first quarter of 2026 in more detail. You can find additional information in our earnings press release and Form 10-Q, which we filed earlier today.

Total revenue for the 3 months ended March 31, 2026, was approximately $1.1 million, representing an increase of 182% compared to approximately $394,000 for the first quarter of 2025. The increase was driven by higher research and development revenue of $220,000, including the Proliant Agreement, ongoing grant revenues of $277,000 funded by CEPI and the Gates Foundation as well as milestone revenue of $200,000 recognized under the Inzymes Agreement.

Total cost of revenue for the quarter was approximately $792,000 compared to approximately $298,000 for the first quarter of 2025. The increase was primarily related to higher activity levels associated with our research and development and grant funded programs, particularly under the CEPI and the Gates Foundation initiatives. Internal research and development expenses decreased modestly to approximately 4% year-over-year to approximately $476,000, primarily reflecting a slight reduction in the number of active internal research and commercial initiatives during the quarter.

G&A expenses increased by $159,000 or 10% year-over-year to approximately $1.8 million. The increase was primarily driven by higher legal and accounting expenses of $221,000 and rebranding and business development activities, partially offset by lower share-based compensation expenses of $110,000 and reduced insurance costs. Loss from operations improved by approximately 5% year-over-year to approximately $1.9 million compared to approximately $2 million in the prior year period. The improvement was mainly driven by the significant increase in revenue and lower research and development expenses, partially offset by higher costs associated with revenue-generating activities and increased G&A expenses.

Net loss for the quarter was approximately $1.95 million or $0.05 per share compared to approximately $2.03 million or $0.07 per share for the same period a year ago. We ended the first quarter of 2026 with approximately $6.6 million in cash, cash equivalents, restricted cash and investment-grade securities. Looking ahead through the remainder of 2026, we expect to see growth in product revenues across our Life Sciences and Food and Nutrition business, supported by recent product launches, expanding commercial activities and growing customer engagement.

We remain focused on building recurring revenue opportunities while maintaining disciplined cash management and keeping operating expenses generally in line with 2025 levels. As we discussed on our year-end call in March, we continue to believe our existing cash resources will provide cash runway into Q2 2027. We will also continue to evaluate strategic partnerships and capital markets opportunities to further strengthen our balance sheet and support long-term growth.

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 Instructions] The first question comes from the line of Matt Hewitt with Craig-Hallum Capital Group.

Congratulations on your progress. Maybe first up on the recombinant bovine transferrin that you've sent initial customer orders out now. How should we be thinking about that ramp, not just this year, but I guess, over the next couple of years? Do you anticipate a nice steady growth in that? Or is it going to be fits and starts at least here out of the gate?

Actually, it's a great question, Matt, and thanks for asking. It's -- I anticipate it's going to be steady, but I don't think it will be like hockey stick level growth. What we're seeing is the initial pilot scales are starting to grow, which obviously we're talking small kilogram orders, right? And then as we move into actual commercial production, we see cultivated meat approved by regulatory bodies, that's when you'll see the volume start to significantly increase because obviously, the amounts needed will start to grow. But each individual product needs to be approved, similar to how things work in the biopharmaceutical side.

So if you're doing a stake, that stake gets approved for a specific animal cell line. And then obviously, they could do a different animal cell line and another product gets approved. So as these grow, I think it will be sustained growth, but I don't think it will be significant. But I think the bigger market is also that it's not just cultured meat. Bovine transferrin is also used in serum-free cell culture applications and diagnostics as well as other bioprocessing and biomanufacturing workflows. So we'll start to see an increase in our research use in that category as well. So it's not just cultivated meat, but we're also looking at IBT will be launching this product as well. So we'll start to see revenues coming from other places.

Got it. Super helpful. And then maybe a follow-up question for Mark. And I think you may have hinted at this a little bit in your prepared remarks. But during COVID, there was a lot of commentary about how C1 could help accelerate and expand the opportunity for COVID vaccines. And obviously, there's been a lot of headlines over the past couple of weeks regarding the Hantavirus. And I'm just curious if that creates or if that presents a similar type opportunity and whether or not you think that C1 could help with potential vaccines for that virus as well.

Yes, Matt, thanks. It's a good question. I don't think we could help. I know we could help. We've developed the technology that's even better than it was during COVID. During COVID, we were faster, quicker and cheaper than, let's say, Sanofi and Novavax's insect cell technologies by many times. But in the CEPI program, this is what's important because when we look at why we're funding through third parties, CEPI, Gates, et cetera, is we're continuing to advance the technology as good as it was, it's a lot faster and it's a lot better today in terms of the ability to get there faster to produce more with higher quality complex proteins.

And to be honest, in the CEPI program, which we're running with Rino Rappuoli with the Fondazione Biotecnopolo di Siena, we've demonstrated now from the plasmid once we get a codon-optimized plasmid with under 3 weeks, we can have stable cell lines run fermentations and purification to the initial stage of purification of high-yield, high-quality proteins that match binding and neutralization for antibodies and of course, obviously, neutralization for the vaccines. And I think it's important in the monoclonal antibody, not just by vaccines, there really, I think, elephant in the room is monoclonal antibodies. And we -- during COVID, there was a 1% deadly disease. If this thing is 35%, 40%, 30%, even 10% deadly and people get infected, you need antibodies. You don't need a vaccine this too late. And so we can get to those antibody proteins much faster in larger volumes, much more affordably without having to remove viruses. So this funding is really critical not only for Dyadic, but quite frankly, for humanity.

And I think the only thing I'd add to that, Matt, is, as Mark pointed out, we are in a different place. We also have first-in-human data. So between COVID and today, we completed a Phase I study that demonstrated a C1 protein was safe and effective for use in a human application. We also have nonhuman primate studies completed with some monoclonal antibodies. So when you look at derisking the platform for human therapeutics, I think in a pandemic situation, we're in a much stronger point. So again, obviously, no one hopes for a pandemic situation. But should things start to turn, we're in a much better position for funding opportunities and obviously, those types of things as we move forward. So we're obviously going to continue to focus in that area.

The next question comes from the line of John Vandermosten with Zacks.

I'd like to dig into the relationship with Intralink. Joe, I recall -- maybe I don't remember correctly, but I thought you were heading to Asia to talk to some prospects that they identified. Can you tell us how that's been going with them? And if you've made any movement with any of the people that they connected you with?

Absolutely, John, and great question. Yes, we've actually expanded our agreement that was in the press release as well to include Europe now. So essentially, they expand our business development footprint very cost efficiently. So they're out there being able to target and at least generate the initial customer development. And obviously, then Mark and I have to come in at some point as we continue to progress those. We've had what I think is significant success, at least initially in Japan with getting customer engagement. We're in the process of identifying product opportunities. We've shipped samples to some of the customers.

But I really think they give us the added horsepower that obviously I don't have or the Mark doesn't have available as we're doing 100 other different things, but they give us the capability to keep these customers moving towards revenue agreements that we don't have internally today, but much more cost effectively. So -- and they're well entrenched. They actually were headquartered and based in Japan. So they're well entrenched in Asia Pacific. They do have a very strong team in the EU as well. So now that that's kicking off, I anticipate we'll start to see increased sampling activity and hopefully increased product purchases as we move forward. But they really help me from a distribution standpoint, also finding out which distributors are ready for these products, which ones we can target to move products faster and obviously, which ones are focused in the same areas that we are like cell culture media and molecular biology workflow.

So it definitely helps us focus our efforts in the right places and supports our activities, our business development activities in those areas.

Okay. And another line item in the press release was about the IBT arrangement. And I wanted to see what the next steps were. What are the next steps after the support channel receives the inventory?

After the support channel, essentially, I guess, I'll let you know, the product actually shipped this week. So we're shipping our first products, which are DNase-1 and transferrin. We will have other products that they will be putting into the channels as well. We'll be looking at things like recombinant alpha-lactalbumin, human alpha-lactalbumin for cell culture applications, human transferrin as well.

So there'll be multiple products, but we started with DNase-1 and bovine transferrin because those are ready to go. But those products have shipped. They now will then start to distribute that throughout their global distribution network. And then their sales teams then in turn, go out to the individual customers, so academic institutions, hospitals, in some cases, research organizations. So right now, we're selling research use products. So those are the types of organizations that their teams will be focused on. So again, it basically takes our products, gives us a sales force and gets them into the market.

[Operator Instructions] The next question will come again from the line of John Vandermosten with Zacks.

Ping, the next question was for you. Now that we're coming up on midyear, what's your best guess on cash burn?

John, good question. I think that's the question everybody is interested in. As you see from the press release at the end of March, we have $6.6 million cash, cash equivalent, restricted cash and investment-grade securities. As I mentioned earlier, we expect to have the same level of cash burn as previous years, which we are less than $5.7 million last year. So we expect the same level, if not less than that, which means we will have enough cash runway into next year this time at least.

Operator, are there any further questions?

No. There are no further questions. And well, actually, sorry, there -- we do have a question from Luis Garcia, who is a private investor.

Okay. Just a couple of questions here. Are we -- I noticed that Codexis sort of doing a lot of things. Do we have anything still hooked up with them where we might get some royalties from products that they produce? Or do they use any C1 and anything of their -- that they produce?

Yes. We don't have anything that's publicly reportable with Codexis from the past. If you remember, we sold that business to DuPont for $75 million. So nothing is going there. But there have been discussions in the past in the recent months of where we might have some benefits for each other.

Okay. How about -- have we already received some royalties from Fermbox and things that we've done? Or is that still sort of like in the pipeline?

It's in the pipeline. We expect we will see them in 2026. We obviously, our focus is on growing the products right now, but we do expect to see the initial revenues, at least from the bioindustrial products in 2026. So that is anticipated.

Okay. One more. Phibro, they've been doing -- using our products and doing research. Is there any time -- sort of time frame where you think we might be able to start finally getting something going on their end because their stock has also been doing very well. And just see if we can sort of jump in on that bandwagon with them if they were to throw something our way.

It's a great point. And honestly, it's also an example of one of the reasons why we shifted towards non-pharmaceuticals. While the partnership itself has -- what I think it's been tremendous. They've invested a lot of time and effort into bringing a poultry vaccine to market. They still have a little bit of ways to go. My anticipation is they will be in clinical trials this year, which could put an approval in the next 12 to 24 months. It also depends on how quick and how stacked up the regulatory authorities are in the EU and in the U.S., depending on where they're going to launch first. But we will have some milestones associated with some of the regulatory approval process. But I do think that there should be some news flow coming out potentially in 2026, but definitely in 2027 around Phibro.

And just to add some color, I mean that's been very successful from the technology side, our side in terms of the yield and the performance. And so as Joe said, we're going to expect some milestones and potential, hopefully, an expansion maybe potentially their license as well to go into different vaccines that aren't included in what they have now.

But then again, it's -- they're kind of right in the time frame. I mean it takes 5 to 7 years to bring a new product to market in that space. And there we signed the deal, I think, in 2018. And here we are 7 years later, they're getting ready to move into clinical phases. So again, it's right on time, but just slower than we'd like, which is why we're moving towards the non-pharmaceutical products.

The next question comes from the line of Glenn Primack with Luca Investment Group.

I'm guessing like, boy, you guys have -- don't have a lot of spare time for playing golf or anything. It's quite amazing how much you've accomplished. And I have to imagine, Mark's probably phone is off the hook with Hantavirus. And Joe, everything I've been reading in these trade journals on like shortages of whey and these food companies can't get proteins, your distributors have to be maybe kind of excited to get your solution out there. With that said, Ping, what do you think -- are you guys going to need to add some bodies headcount-wise come '27 as you continue to ramp?

Glenn, it's a great question. I mean, obviously, we're going to do -- anything we do in that nature is going to be judiciously and basically driven by product sales. So as things start to scale, we will need additional support operationally just for product shipments, product manufacturing. That does take a significant amount of time to get products labeled correctly, make sure they get out the door. But not something we're going to do immediately, but it is on the radar as these products start to scale, but it's going to be revenue dependent. As things start to move, we will look at which parts of the company we need to support further and pull that up. But obviously, our main focus right now is on getting more product into the market, so the revenues start to drive, and then we'll look to improve our capability internally. But it's a great question. Mark?

Yes. Well, I mean, I think as Joe pointed out, we just hired IDT to go after the European market because they've done a great job in Japan. And so we now have experience with their sales team, at least in the Japanese and their oversight in the general manager. And we now believe that going after the European market on the cell culture media, DNase-1, RNA enzymes, cultured meat, cell and gene therapy, all the things that we're launching and have launched and are launching like transferrin and albumin with Proliant, we need more people, and we're doing it judiciously. Joe said, in this case, it's IDT, but we've hired them as our sales force, so we don't have to go hire people. And they have the contacts that we don't have. So this will be a faster way to get to the market.

Got it. And the margins are still really, really, really, really good. I hope you guys get some rest this weekend just a little bit, and I hope to see you at the Biotech show in San Diego in June.

You certainly will. We'll be there, Glenn.

The next question comes from the line of Tony Bowers with Intro-act.

Joe, nice progress. I wonder if you could just reflect on the nutritional market, what the potential is for cultured meat demand for your ingredients versus the non-animal dairy. I think cultured meat seems -- it's been struggling to take off the non-animal dairy side. I think there's got to be a huge conceptual demand. And with agricultural inputs going up, that can only help.

And Tony, it's a great question. And obviously, you always have great insight into the market, and you're exactly right. The demand, as I would say, is more acute in cultured meat because they realize in order to compete in the market, they have to drastically reduce their production costs. Similarly, it's a similar problem in the non-animal dairy space, but it's a little different in that you're competing with milk-derived products. So it's about scale. You have to be able to produce these at large scales and lower cost to compete with milk. So they both need to lower cost just in a little bit 2 different ways. So I think that's also why we have an advantage. I think cultured meat, like I said, the demand is more acute because they are in pilot phase and they are seeking regulatory approvals.

So if they get the regulatory approval, they have to be able to bring the cost of the final product down if they're going to be able to compete beyond high-end uses in restaurants. So I think that will have to remain to be seen. On the non-animal dairy side, that is going to continue to pick up, but it is all about scale. Obviously, I think you saw what happened with perfect Day. There's a little -- there's a scarcity of protein in that -- or non-animal protein in that segment, and I do believe we can help to fill that gap. But it is about being able to scale the production strains up to the levels necessary to compete in the market. And that's what we're focused on right now. But you're 100% right, there's a lot of demand there in both segments, but I do think the nearer-term opportunity for us, at least in terms of direct revenues is just going to be cultured meat for a little while as we start to ramp and scale in non-animal dairy. But overall, non-animal dairy will cultured meat as a market for the foreseeable future. I mean that's just the way it is.

Which geographies do you think will have the least regulatory problem on the meat side?

Honestly, I think the U.S. will probably have the least regulatory one, at least from our standpoint, we obviously -- we have a GRAS-certified organism. We got that in 2009. So we're using self-affirmed GRAS pathway for these products. Inzymes, they filed their self-affirmed grass this year, and they're already commercializing their bovine chymosin. And we'll use the same process for alpha-lactalbumin. So I think the U.S. market, again, at least now is a little more regulatory friendly than the EU. But I definitely -- that obviously could change tomorrow. But I think with the demand for protein and the demand for more specialized and cleaner nutrition, I don't see significant regulatory changes in the short term. Mark?

Yes. And I think that if you recall, BASF has their own GRAS approvals in the EU and U.S. on the [indiscernible] technology platform. But it's interesting because with the situation in the Gulf with Fermbox and the Inzymes that turns biomass into sugars, renewable fuels and chemicals are potentially back in vogue and people paying attention because we can't rely on oil. And so I think that our positioning and with our technology depth of this is ideally suited to turn biomass into sugar, and we've already reentered that space with Fermbox, and they and us are trying to expand that as the situation in the Gulf continues to fester.

There are no further questions at this time. And I will now turn the call back over to Dyadic's President and COO, Joe Hazelton, for closing remarks.

Thank you. As we close, I want to emphasize what we believe is most important. Dyadic today is no longer simply developing technology platforms. We are increasingly commercializing products, supporting customers, expanding partnerships and building recurring revenue opportunities across multiple markets. We're seeing growing interest in our technologies, increasing commercial activity across our partner network and encouraging early signs of market adoption as products move from development into commercial channels.

While we still have important execution work ahead, we believe the progress achieved over the past year has significantly strengthened the business and positioned us for continued operational and commercial advancement. Our focus is now straightforward, continuing scaling product sales, expand strategic partnerships and distribution channels, support customer adoption and maintain the disciplined operating approach that has allowed us to extend our runway while continuing to build the business responsibly. We remain confident about the opportunities ahead and appreciate the continued support of our shareholders, partners and employees as we continue executing our strategy. Thank you, and we look forward to updating you on our continued progress.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Good evening, and welcome to Dyadic International Full Year 2025 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, March 25, 2026.

I would now like to turn the call over to Ms. Ping Rawson, Dyadic's Chief Financial Officer. Please go ahead.

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 will 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?

Thank you, Ping, and thank you, everyone, for joining. Since I stepped into the President's role in June of 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 9 months, we've made significant progress executing against that strategy. We've completed a corporate rebrand to Dyadic Applied BioSolutions, align the organization around commercialization, strengthened our technological capabilities through CRISPR licensing, secured manufacturing through our expanded partner -- Fermbox partnership and most importantly, we began moving products into the market.

And I want to emphasize this point upfront. 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 annual 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 supports 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 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 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 transferring 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 DNA 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-1 is a widely used high-value enzyme with applications across bioprocessing and molecular biology workflows. DNase-1 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 have completed production validation and together with Fermbox launched recombinant RNase-free DNase-1 as our first product commercialized under our expanded partnership with Fermbox. 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 and 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 qualification and into scale 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 & 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 database 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 way 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, nonanimal produced recombinant Bovine 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 collaboration 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 nonanimal 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 EN3ZYME, an enzyme cocktail produced using our database platform that converts agricultural residues into fermentable sugar for biofuels and other industrial applications.

Fermbox has fulfilled it's first large-scale order and is expanding sampling and commercial activity, including in the Asia Pacific region, demonstrating growth 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 efficiencies from the 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, Dyadic's CEO, to provide an update on these collaborations. Mark?

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 nondilutive capital edition 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 [indiscernible] 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 monopolitan antibodies starting RSV and malaria are comparable to [indiscernible] produced material, supporting further development. And our CEPI collaboration with the Fondazione Biotecnopolo di Siena, we're advancing recombinant vaccines, including scale up towards GMP manufacturing with an H5AV 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, [indiscernible], Uvax Bio, AdaptVac and the European Vaccines 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 to 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 antigen and multivalent vaccine candidate.

Early preclinical studies indicate that C1 produced RSV prefusion antigens, performed comparably to [indiscernible] produce antigens while demonstrating potentially improved neutralizing antibodies [indiscernible] relative to [indiscernible] production-based systems. These respiratory indications represent 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 free fusion antigens, potentially enhancing efficacy while also improving cost efficiency and shortening overall development time lines. 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'll walk through our full year 2025 financial results.

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 on 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 reduced the license and milestone revenue, partially offset by $1.86 million increase in grant revenue from the Gates Foundation and ZAPI. Cost of R&D revenue declined to $0.6 million compared to $1.2 million in 2024. Gates and ZAPI 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 continue to invest in advancing our internal 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 and 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, cash equivalents, restricted cash and investment-grade securities. Our net cash used in operating activities was approximately $5.7 million 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 & 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 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 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, low roadshow and less market disruption.

Importantly, putting an ATM in place now allows us to be proactive and prepared in 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 Instructions] Our first question comes from the line of Matt Hewitt with Craig-Hallum.

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 '27 and '28?

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 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. So we do, I guess, look at it as a slow ramp because the products do need to be into the market qualified for use in the workflows that they're being ordered for. So while some -- if it's like a research type of use, that's usually a quicker pickup and a quicker conversion than something in cell and gene therapy. So it kind of depends on use case as well.

But right now, 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. And obviously, our goal is to sign more distribution agreements so we can have larger product volume opportunities rather than just with individual companies.

Got it. And 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?

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. So -- and it also depends on the market. In certain cases, like 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 maybe we don't have a strain that 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, a little more difficult because the customer has to fund additional work [indiscernible] 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 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.

But 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? And if you can get the Phase I, the products work 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. We can get them to clinical or technical validation a lot faster in the research and diagnostic space than we can and let's just say, the GMP space.

Our next question comes from the line of John Vandermosten with Zacks.

Great. 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?

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. 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. So we do -- every time we do a deal, we do try to evaluate what other capabilities do these partners bring into the mix.

And like I said, Fermbox expands our own capability and then obviously, something like IBT gives us additional kind of boots on the ground, which is important for us as well because obviously, we don't have that. And then 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 the recombinant albumin product, which is AlbuFree DX. And 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. 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.

My next question is on pricing. How much control does Dyadic over pricing with all the various arrangements that you signed? And I guess I'm thinking of that in 2 ways. One, one is that maybe these are just market prices and you take it or leave it. And then secondly, perhaps how involved can you be in being competitive since you have lower cost structure than some of the other products out there?

Another great question. In our partnered programs, obviously, we have some visibility into that process, but it is partner-led. But in things like the distribution agreements, we obviously built our margins in ahead of time. So regardless of what the product ends up being in the market for, we've already obviously made our money on that or made our revenues. So again, depending on the segment we're looking at or the partner you're looking at in times, we have more control like with through a distribution agreement or through like the growth factors that we were selling into, but it also depends on the market. So when negotiating with cultured meat companies, they're obviously much more price sensitive than someone looking at using our transfer and for cell culture media applications in cell and gene therapy.

So 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 as 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.

I don't know, Mark, if you want to add anything?

Yes. Well, John, I think also that there's 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're comparing the natural albumin to the albumin-free product that they're putting out and the data is quite compelling. So the regulatory agencies in 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. So we're 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. So we're not going to give up margin if we don't have to. [indiscernible] wash industry way back, we made something for $1, sold it for $8, we obviously became more competitive. And 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 in the general market in general, animal-free proteins is exploding on a worldwide basis.

Our next question comes from the line of Louis Titterton, a private investor.

This is probably an impossible question to answer. But in your planning, your financial planning, when do you think you might hit breakeven?

That is always the million-dollar question. And you're right, it's not something I can answer. 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 don't want to make bad decisions that seem like maybe it can help us in the short term but ultimately may not be in the best interest of the organization.

And I'll give you an example of something like transferrin. Transferrin we know it is an extremely valuable product. right? And while -- if we did something rather drastic sooner, we could bring in 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 going to be. But the goal, obviously, is to be as revenue positive as quickly as possible. And I think our products that we have give us the ability to do that. We just need more of them. We can [indiscernible] to get them commercialized and into the system. But as you look out into the future, I don't think it's going to be an extremely long time, but I can't give you definitive answer.

Our next question comes from the line of Tony Bowers with Intro-act.

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. 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. 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?

I'm going to let Joe go first and then I'll address your questions.

Sure. Sure. So it's actually interesting you say that there's actually a lot of different factors that are pushing this drive in the food space, 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. And I don't know whether that's due to just differences in the process or if it's that they're trying to make too much too quickly.

But the biggest, I guess, 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. So there's obviously an energy component to that, but there's also a regulatory component in terms of safety. And I think that's probably the bigger one that I see moving the food and nutrition category as well as the ability to have specialized nutrition. So some -- like you're seeing in the biopharmaceutical space. [indiscernible] talked about individualized medicine. That's now starting to be talked about in these alternative protein conferences. Can we make things obviously specifically geared towards elderly patients with diabetes or children with certain genetic elements. It's very interesting. I think we're still miles away from seeing those on the market. But we definitely do see a shift towards these more efficiently scalable nonanimal proteins for these uses.

[indiscernible].

Go ahead, Mark.

Well, I think if you think about it, alpha-lactalbumin in [indiscernible] are made in such small amounts from milk. So even if you wanted to make it, it's not [indiscernible], it's not accessible. And so somehow it's got to be made in an alternative manner if you want to have [indiscernible] with the nutritional benefits or in adult health drinks that we all [indiscernible], right? So those are great opportunities, whether the margins if we can produce these at the right levels at the right cost and the gates are just wide open for applications. Now it's 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, so many partners we have, they've been in these industries for decades. They have the application knowledge, the experience, the market access. So if we hit these things at the right yield and right cost with the [indiscernible] we're right in the game. So that hopefully addresses some of those issues.

On the biopharmaceutical side, it's not about just pandemic preparedness. People are not waking up and recognizing that, for example, the work we did with Uvax and 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, 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 or it's just -- there are people out there that we're talking to that potentially can fund some of these things, these are multibillion-dollar opportunities. So it's 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 nonanimal primate space.

So all these things, whether it's Gates or CEPI, they're opening the gates and the doorways to future products. It could be a shingles, it could be HPV. There's 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, but we're 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.

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?

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. So basically, it's really percentage of completion [indiscernible] into how it's calculated.

Our next question comes from the line of John Vandermosten with Zacks.

Thank you for taking another one. So Joe, bigger picture, what's the utilization rate right now for biomanufacturing in the United States? And 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?

As far as capacity in the U.S. versus ex U.S.?

Correct, yes.

I think you're right. I haven't seen a drastic shift, but it is shifting. Not just the onshoring, but obviously, the safety components, and obviously, tariffs and the political environment is driving some of that. but obviously not having to shift very expensive products worldwide is also attractive. And if you can make them here at home, 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'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 weight in terms of manufacturing capacity. So I think the need is there. The question for me is going to be, can we ever hit the true cost metrics to produce some of these GMP products here in the U.S. at the price point that these other countries that will [indiscernible] like if we'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. And that, I don't know. I don't know if it's going to change whether or not. The whole reason that there's not a lot here today is just the cost. And I don't know if that's going to really change just because we have more capacity. Hopefully, it will drive the cost down.

I don't know, Mark, do you have any thoughts on...

Well, I think the efficiencies of the cell line that can pump up more product and yields can help drive the, let's say, difference between the cost because it's not labor-intensive. And 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. So to be honest with you, I think that we're heading in the right direction, not only from a government regulatory pursuing onshoring the supply chain.

And one of the things that we deal with all the time, for example, with [indiscernible], recently and there's a couple of conferences coming up is the supply chain disruption, it was just -- it's not -- you can see it came with oil, right? 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. So people are realizing now that we have to have onshore capacity. But 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. But with AI and automation, that difference is going to just close the gap. So we won't have a far, let's say, the gap that we've had in the last 20, 30 years with India and China. We're going to close that gap through innovation. And that's why people are looking at faster growing cell lines, picking produce more or less with cheaper Media.

There are no further questions at this time. I'd like to pass the call to Dyadic's President and CEO, Joe Hazelton.

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 to 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 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.

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

Good day, and welcome to the iAcessAlpha Virtual Best Ideas winter Investment Conference 2025. The next presenting company is Dyadic International. [Operator Instructions]

I'd now like to turn the floor over to today's host, Joe Hazelton, President and Chief Operating Officer at Dyadic International. Sir, the floor is yours.

Thank you, and good morning, everyone, and thanks for joining us today. I'm Joe Hazelton, President and Chief Operating Officer of Dyadic Applied Biosolutions, and I'm pleased to walk you through our December 2025 investor presentation.

Our mission is clear: to deliver scalable, animal-free recombinant protein solutions, serving the life sciences, food nutrition and bioindustrial markets. We believe Dyadic is at a true commercial inflection point with multiple products entering the market and revenue engines that are now active.

Before we begin, I'd like to remind everybody that today's discussion will include forward-looking statements, which involve risks and uncertainties. Actual results may differ materially. Please refer to our SEC filings for additional details.

Dyadic has a long history of innovation. Initially founded in 1979 in industrial biomanufacturing, we've gone on a basically 4-decade journey of growth in our industrial Inzymes business, which we built from 1992 to around 2015 was acquired by DuPont for $75 million. Since that time, we've engineered or fungal genetic platforms to produce high-value input proteins in high-margin and relevant areas where animal drive proteins are starting to not necessarily fall out of favor. But essentially, the market is moving towards more sustainable and predictable proteins.

The major shift for Dyadic is that our focus is now on input proteins rather than therapeutics. So when I joined the company in 2022, I embarked on a transition of taking the company from R&D revenues and grant-based revenues based on therapeutic projects to revenues based on commercial applications of our technology in these core segments. So from 2025, we've not only expanded our platforms to be able to produce proteins, including the death of this platform, food & Nutrition, we're also focusing on building a portfolio of products using that technology to accelerate our revenue-generating capabilities. We expect starting this year and moving through '26 and '27 to have multiple product launches via direct sales and partner channels.

So the real story for today is why Dyadic and why now? Well, we have proven platform validation. We have two dual platforms based off the same native fungal species to address different market segments and basically, what it comes down to is different margins within those market segments. We have a robust genetic toolbox and additional licensing for the CRISPR-Cas9 system that allows us to optimize and strengthen our ability to produce strains that can service the market.

We're transitioning from R&D to commercial execution. While, traditionally, we've been focused on enhancing the platform in the therapeutic spaces, we're now focusing on areas where the products don't require basically FDA review or human clinical trials to get them to market. We're focusing on non-therapeutics which means near-term revenue. We have faster time lines and lower regulatory thresholds, and we can go from proof of concept to revenues in about 12 to 18 months. And now we're at that inflection point. We had our first bulk purchase orders received for growth hormones in the fourth quarter, and we're expanding our portfolio and commercial reach. That pipeline is going to continue expanding within segments of the market where we feel that our technology has specific advantages either in terms of cost or productivity and we have active partnerships that are going to drive revenue across those core segments as well, such as life sciences, food nutrition and Bioindustrial.

So while I'm going to talk about multiple different segments of the market in all three of our core verticals, what we do remains the same. We use our platform technology to turn engineered strains into scalable protein solutions. We take our C1 or Dapibus platforms, which I'll explain a little bit about in the coming slides, to design and engineer precision strains to produce nonanimal recombinant proteins. And then we build -- basically, we build the methods of production to express and purify and then scale the application or scale to the application.

So the beauty of this is, even though we can talk about everything from diagnostics to food proteins to bioindustrial, the job of Dyadic is to engineer these strains to meet the needs of the markets that we're entering into. So while it seems we're doing a lot of different things, our day-to-day activities ultimately remain the same.

So these are our two engines of growth: our C1 and our Dapibus microbial platforms, they're eukaryotic platforms to produce recombinant animal-free protein solutions. They've been specifically designed for speed, productivity, scale and low cost. They deliver industrial performance because that's our heritage. We came from the industrial biomanufacturing space where not only DuPont purchased our technology in 2015, but we work with companies like BASF, Shell Oil, Abengoa. We've run all the way up to 0.5 million-plus liters in commercial production. We have proven platforms that have been proven the ability to scale.

We've since reengineered these platforms to produce more high-value targets. Our C1 system has been evolved to produce more complex proteins and enzymes for everything from therapeutic monoclonal antibodies to vaccine antigens, but now we're using it produce things like cell culture media that are essentially input proteins in the biopharmaceutical segment. It is a platform that's been validated in humans. We actually completed a Phase I program and it's been optimized to produce high yields and low cost, but also address the regulatory readiness that you need when you're entering into therapeutic markets. And we use this platform, specifically in our Life Sciences segment.

We've also developed our Dapibus platform to address food nutrition and bioindustrial where the margins are obviously tighter. You need to compete with animal or plant-based proteins. And to do that, you need a system that can basically produce large amounts of recombinant proteins and enzymes at costs comparable to how they're sourcing proteins today. So we've built the Dapibus platform to produce these less complex, but more margin-sensitive proteins, and it enables sustainable, affordable large-scale manufacturing with a low carbon footprint and sustainability.

So how are we going to monetize? Essentially, we have a 3-pillar strategy: buy, brand and build. Our customers can buy products directly from us, and those will be suppliers, distributor or end users across all three of our core segments, and we can do direct sales, bulk sales, OEM sales, and we're also looking to launch our own branded products. Just as I mentioned, we already have our first bulk order for growth factors that came in the fourth quarter, and we're looking to expand in that segment and others very rapidly.

You can also brand with us. Our platform technology enables us to license strains that we build or the platform technology itself to suppliers and manufacturers that want to produce their own products which gives us a second potential revenue stream.

And then you can build with us if potential parties have their own proprietary assets, but they're looking for an expression technology that can hit the margins as well as the productivity, we offer a simple and effective way to build your own brands using our technology. So those are the three monetization channels that we're using to drive commercialization.

As I mentioned before, our three strategic growth verticals are Life Sciences, Food Nutrition and Bioindustrial. And while these are extremely large segments of the market, we are focusing in on areas like in life sciences, where we're focusing on cell culture media, cell and gene therapy, areas where we have specific advantages in terms of the products that we offer and the cost that we can achieve. We have things like human transfer and human albumin, human growth factors, those are the core components of cell culture media. We also have products in the DNA and RNA space. And again, it's where our platforms have specific advantages in terms of being able to produce these very expensive proteins and enzymes at much more affordable prices due to our high productivity and our lower overall cost of goods and we're focusing on those market applications that are growing the most rapidly, which is cell and gene therapy, diagnostics, reagents and therapeutic proteins and enzymes.

In the Food & Nutrition segment, while the alternative protein segment is likely a $50 billion to $70 billion market, we're focusing in on nonanimal dairy as well as functional food proteins because again, our Dapibus platform, we feel, has specific advantages in addition to being a GRAS-certified organism, which basically means it's safe for food and nutrition uses. It also has the high productivity and low cost that are needed in these segments like nonanimal dairy, where we have products like Bovine alpha-lactalbumin, which is a wave protein that's used in milk-based products, everything from infant formula to sports nutrition and medical nutrition and we have things like Bovine transferrin, which, again, is a cell-culture media product that's used in applications like cultured meat. So we're at the forefront of next-generation food solutions using our technology to bring down the cost of these animal sourced products.

And we're also reentering the bioindustrial space through our partnership with Fermbox Bio. They're a company based out of India that we've licensed the technology to essentially get our foot back in the bioindustrial market for cellulosic enzymes. This is a market that we know very well. And while the overall bioindustrial enzyme market is probably over $150 billion, we're focusing on the $6 billion market of cellulosic enzymes, where we have the most experience and obviously, our platforms have proven capability in these segments. And these are products used for biomass conversion as well as biofuel preparation as well. So we have the applications, and obviously, we have the capability to enter those markets.

So diving a little deeper into life sciences. As I mentioned, we're trying to focus in on the areas where they're growing but where we have specific advantages. In cell culture media, these are products that are used to grow either therapeutics, like they -- essentially, you need them to grow Chinese hamster ovary or CHO cells, which is one of the most used expression platforms to produce monoclonal antibodies. And we also are producing things like human albumin that's used as a vaccine stabilizing agent since using cell and gene therapy, and it's also used in diagnostics and medical device coding.

We have a partnership or a proof point in this space and that we've licensed our human albumin to provide health and biologics. And they are one of the largest providers of naturally derived bovine albumin in the world. They have a global distribution network, a global customer base, and they essentially account for about 2/3 of all the bovine albumin that's currently produced in the world and now they're able to offer their partners a nonanimal version of albumin for them to use in these higher-margin segments.

So they're expanding their capability. We have a great partner. We've already received a $1.5 million in license and milestone fees and we have shared the profits on the back end. And Proliant is in the first stages of launching three different products in the cell culture media and essentially the albumin space in general into these markets. So we're very happy to have them as a partner. And we're also very happy that they're getting ready to launch these products.

In addition, we are launching human transferrin and human growth factors ourselves through not just our partnerships but also through distributors and OEM models. And we do believe that this is a segment that will contribute heavily to our success in the future.

Then you have the DNA and RNA technology segments. Now we're focusing in on a very specific area, which is essentially molecular biology reagents. And these are products that are used to make mRNA or cell and gene therapies. Basically, any time you need to manipulate DNA or RNA, there's a group of enzymes, there's 5 enzymes that are typically used to do this.

Our first product is going to be DNAse I. We actually are getting ready to start shipping product to some of our distributors in the fourth quarter. And what's nice now is we have, as I mentioned before, we have access to the CRISPR technology in that we'd be able to further optimize strains like RNA inhibitors or DNA ligases to further penetrate this market. So we want to add products into these segments that are particularly not just high value, but growing very rapidly as well. So as diagnostics and therapeutic grows, we're providing the tools that these companies are using to make these therapeutics.

So our products aren't going to require the same level of regulatory validation than a therapeutic role so we can enter the market much more quickly. And as an example, the partnership that we signed with Proliant, we signed it in 2024 and in 2025, we're getting ready to launch products with them. So again, much faster routes to commercialization.

And we've also expanded our commercial capability through a partnership with Intralink which is a business development firm that is essentially helping us in Asia Pacific region for Korea and Japan, where cell and gene therapy as well as other life science utilization of the cell culture media products is growing rapidly.

So how does the revenue come in? And as you look at Dyadic, it's going to be layering revenues. So we're going to be layering partnership revenues like with Proliant on top of direct sales revenues like DNAse I or Transferrin we also. Retain the ability to partner products like DNAse I and Transferrin. So from the same strain, we can actually have multiple monetization channels out of one strain, whether we sell it ourselves or through our partners.

So as I mentioned, we're launching -- through Proliant, we're launching human albumin in 2025. DNAse I is actually going to launch in 2025 as well. So we should start to see revenues coming in from both of those. Transferrin will actually start to ship research-grade product in December. So we will start to see some revenues in the first quarter. And as I mentioned, growth hormones or FGF, these are fibroblast growth factors. These have actually been moved up. We actually shipped our first shipment of bovine growth factors into the cultured meat segment. So we're actually able to start pulling these forward a little bit, and we're starting to see some revenues in these spaces.

And as we move out into '26 and '27 further expanding their portfolio with, as I mentioned before, further molecular biology reagents for DNA and RNA manipulation and also functional proteins that are used not only in the life sciences space, but things like lactoferrin and alpha-lactalbumin, these are also proteins that are found in milk products. So these will have multiple applications as we move forward. But essentially, they can also be used for research grade uses such as carrier proteins or in biochemical assays and analyses.

So as we move into the Food & Nutrition segment, again, our focus is on nonanimal dairy products. Just last week, we signed a partnership with BRIG BIO to commercialize or to develop and commercialize our bovine alpha-lactalbumin strain. That partnership brings along with it access fees, milestones, royalties and co-marketing capabilities. So we'll actually be able to book the revenues from products that we're able to sell bovine -- that we're able to sell. We have an existing partnership with Inzymes where we've received almost $1.2 million in license and milestone fees since 2023 is when we signed that deal, and they're getting ready to launch a non-animal dairy enzyme. So we're focusing on ingredient suppliers, food and beverage companies and all dairy brands as we move into these segments. And this is a very fast-growing segment, whether it's infant nutrition, sports nutrition, LP aging. These are key areas.

Another area of food nutrition is cultured meat or lab-grown meats. And this is where we're starting to see some significant traction in terms of our cell culture media for growing animal muscle cells. So things like transfer and growth factors and albumin are also used not just in -- to grow CHO cells, to grow therapeutics, they're also used in the food nutrition space to grow animal muscle cells and we saw the first bulk purchase order in the cultured meat segment of our bovine growth factor. So as we start to move forward here in the food nutrition space, we see a lot of acceleration potentially, and we also see the ability to expand our product offering with things like lactoferrin and other nonanimal dairy enzymes and growth factors.

And in the bioindustrial space, as I mentioned, we have a partnership with Fermbox Bio. It's a 50-50 profit-sharing arrangement they're essentially going to be our bioindustrial partner because they have the scale as well as the capability to enter into key markets like India and Asia Pacific as well. And they're essentially going to be responsible for producing and launching our products in this space for biofuels, biomass reduction and they currently have the EN3ZYME product, which has already had initial purchase orders and they're looking for follow-on orders, and we expect to see revenues from this partnership in early 2026. And now we started to expand our efforts in sampling into other biofuel organizations. And we're also exploring other uses of our cellulosic enzymes in things like regenerative medicine where we have capabilities as well.

So we're looking -- as I mentioned before, having a platform technology enables you to enter into multiple different market segments very quickly. But again, what we do remains the same. So while we're in a lot of different things in a lot of different industries, it's kind of like the intel inside. We want to be in everything. We are the backbone of building some of these platforms to support these markets.

So in looking at the terms of, again, where is our revenue going to be coming from? Well, as I mentioned, we have partnerships like with Inzymes and BRIG BIO and Fermbox, but we also will be selling direct products into these segments as well.

So our Inzymes partnership, they're going to be launching in the nonanimal dairy space this year, bovine transferrin is currently being sampled in the cultured meat segment. And as I mentioned, we just partnered Bovine alpha-lactalbumin. So we'll start to see some initial sales from our existing partnerships while we're developing other products like bovine and human alpha-lactalbumin, which is essentially a high-value way protein for the infant nutrition, medical nutrition areas. And those take a little bit longer as you have more development work that needs to be done to ensure you have the quality the application testing that needs to be done in those segments, but we expect to start seeing revenues in late '26, early '27 from the food and nutrition space. But as I mentioned, both human and Bovine alpha-lactalbumin have application in life sciences as well where we may be able to see some earlier revenues.

And then you layer on bioindustrial as well, where we expect to see revenues from Fermbox. And additionally, we have some direct sales opportunities for pulp and paper enzymes and we're also starting to look forward to the future in sort of like cosmetics, with hyaluronidase, which is an enzyme that's used quite heavily in the cosmetic space.

So as you look -- and I think the next slide will be the easiest to share with you. This is how we're going to achieve our larger revenues and get to being cash flow positive in a very short time frame. We're layering products on top of licensing, on top of partnerships. So each of those plays a role in ensuring that we get our pathway to revenue. We already have product revenues coming in from bovine growth factors. We expect to ship DNAse I and -- actually respect to ship human transferrin in December as well. Our partnerships with Fermbox, our partnerships with Proliant, our partnership with Inzymes, those are all starting to commercialize or have commercialized. So we expect to see revenues coming in from them. And then as you get into the out years, the partnership that we just signed last week with BRIG BIO, you'll start to see like Bovine alpha-lactalbumin and food nutrition start to come in, in the '27, '28 time frame. So as you look at this, we're layering revenues on top of revenues from the by brand and build strategy.

We also are going to continue -- we're not completely walking away from biopharmaceutical applications. We are going to continue our legacy R&D programs. We have active partnerships with people like the Gates Foundation, where we're developing monoclonal antibodies. We also have partnerships with CEPI, the Coalition for Epidemic Preparedness Innovations, where we're working with the Fondazione Biotecnopolo di Siena. It's led by Dr. Rino Rappuoli. He's one of the foremost leaders in vaccinology. He's also part of the vaccine hub or the European vaccine hub, which is EUR 170 million initiative for pandemic preparedness in the EU.

So we're going to continue to advance these programs because it helps to add greater visibility and validation to the platform for therapeutic use but it's not going to be at the expense of our focus or our capital resources. These are all fully funded, externally, fully funded programs that will continue to provide potential long-term value for us. while we're focused on the near-term revenues of products and partnerships of commercialized products. So we obviously will continue to look for other partnerships in areas where we can advance our technology in the therapeutic space while at the same time, sticking very close with commercialization.

We have a veteran leadership team, our Founder and CEO, Mark Emalfarb, he spends the majority of his time focusing on our legacy programs to ensure that we continue to move those forward. while I maintain the day-to-day operational oversight of our revenue strategy. So we continue to build out our capabilities and we have the right team to execute it.

So I'll just leave you with why now? And truthfully, it's because we've transitioned. We're no longer just an R&D company. We're actually using our technology to produce products that we can sell or our partners can sell today. And as we do that, we're going to expand our portfolio.

We've rebranded the organization. We have a new website. We have our new name with Dyadic Applied Biosolutions. We have new materials that are aligned with our commercial strategy. So essentially, we've aligned our business from the ground up to focus on commercial revenues. Both of our platforms have been validated, and we have active partnerships across all three of our segments. We're continuing to add value and some competitive differentiation with the ability to have access to the CRISPR technology, and we're now starting to actually see product revenues coming in. This focus on non-therapeutics is what's allowing us to bring those revenues earlier in the life cycle. We're not focusing on products that they require FDA or human clinical trials.

So we have multiple launches of products. Just in the cell culture media space, we have albumin launching with Proliant. We have transferrin and growth factors that we're launching, and we're also looking to partner those as well. We're expanding our commercial footprint by our partnership with Intralink in Asia Pacific that's already produced several potential opportunities to work with distributors in suppliers in those markets where cell and gene therapy is growing very rapidly.

And we're going to keep focus -- we're not going to -- we're going to have the legacy programs to provide those tailwinds for us, but it's all externally funded. So it's nondilutive partnerships that's going to strengthen our technology and keep that global visibility of Dyadic in the platform in the therapeutic space.

But the revenue inflection point is coming. We anticipate a step change in commercial revenue starting essentially right now, we're in late 2025, and we're beginning to launch products. And we have multiple products across all of our segments that we're going to be launching and driving growth in the near future.

So with that, I will say thank you, and we'll take a look at the Q&A.

All right. The question is, can you update when first meaningful revenues from C1 and Dapibus?

And it's a great question and hopefully, I addressed it a little bit in the presentation. Essentially, we expect to see meaningful revenues beginning in the first and through the second quarter of next year. We have products that we're supplying -- that we're currently engaged with suppliers and distributors, and we're starting to produce those products now so that we can get them into the market. So again, not -- we're layering revenues on top of revenue. So we anticipate also the Proliant partnership will be providing revenues. Fermbox will be providing revenues. And then we have our OEM agreements and products that we're going to sell directly into the market. So our goal is by the end of 2026, we are essentially showing the revenue growth that we can expect and hopefully accelerate through the rest of the forecast period.

The second question is, can you update us on the size and quality of your customer pipeline across media, dairy and industrial applications?

So the customer pipeline is actually very broad. So we have -- as I mentioned, we have a buy, brand and build strategy. So we have multiple customers today that we're working with for distribution and supply agreements where we will either be providing them OEM product that they'll package and sell themselves. And that is happening across cell culture media, and we're working specifically with cell culture media suppliers and distributors, both in the EU and the U.S. And as you look at nonanimal dairy, those are areas where we have immediate applicability for things like research grade, human alpha-lactalbumin.

But those products like bovine alpha-lactalbumin or lactoferrin, those need additional development to hit the cost as well as the quality thresholds for these markets. So while we have very high-performing strains today, they need further development and then application testing to ensure that they have the same functional properties and qualities that you want in those products. So we -- as I mentioned, we just signed with BRIG BIO, it's a company where a lot of their leadership and their support staff have come from companies like FrieslandCampina or Formo, these are companies that are large dairy companies that have that expertise in the segment. So in areas where we don't have the internal knowledge we're trying to partner key groups or key companies that can help us drive and enter those markets.

And the industrial applications, that as well, we're working directly with Fermbox, and they're sampling multiple, not just multiple companies within the biofuel space, but also biomass processing. So we're working with companies even outside of biofuels like in the sugar industries where you're processing sugarcane and things of that nature. So we have multiple customers across the segment in addition to products that we're looking to push into the market through OEM and direct sales agreements as well.

As more products move from R&D to commercial sales, how much operating leverage should we expect? The nice thing about the -- well, the nice thing about our technology is, as we've spent, again, the last 10 years basically reengineering these cell lines to produce these products, it takes about 12 months to go from proof-of-concept to a cell line that we can leverage either through direct sales or potential licensing. So do I expect that -- yes, well, we have some leverage on that. Of course, we will because we need to develop some of these strains.

Now some of them will be partnered, we'll co-develop them like we are with BRIG BIO or like we've done with Inzymes and some of them will look to put forward ourselves. But the nice thing about our system and the fact that we've used it for so long is we know how to move these products very rapidly. And I don't want to say inexpensively but it's -- they're much quicker to move through the process and to get them to a revenue-bearing state, you're not looking at tens of millions of dollars, you're looking at a couple of hundred thousand dollars to take you from proof of concept to where you potentially have a research grade material, like DNAse I, that's one where we've probably spent around $200,000 and now we're getting ready to manufacture. The leverage will come on manufacturing the products to get them actually sold into the market. The development costs are really de minimis in terms of leverage we should expect.

So is the approximate $12 million revenue run rate, about right to reach cash flow positive financials?

That's about right. It's likely a little lower. Our average burn is around $4 million to $5 million per year. Obviously, we have some expenses due to the manufacturing. So that $12 million is right around that rate. It also depends on the margins we're able to achieve in some of these segments. In Life Sciences, I expect to achieve higher margins than I do in Food Nutrition or Bioindustrial, which is why the majority of our time effort is focused on Life Sciences. So if we're operating at a 50% margin, yes, $12 million would be there for -- potentially be better than that, then obviously, the number would be a little bit lower. But essentially, that's what we're looking to achieve. But that's not too far from what I would expect.

And I'm seeing no further questions. Yes. I'm seeing no further questions. So I want to thank everybody for their time today. And hopefully, you'll see us and look for us in the news here because we obviously have a lot of products that are getting ready to launch, and we're looking forward to growing with our potential.

That concludes Dyadic International's presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.

Good evening, and welcome to Dyadic International's Q3 2025 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, November 12, 2025.

I would now like to turn the call over to Ms. Ping Rawson, Dyadic's Chief Financial Officer. Please go ahead.

Thank you. Good evening, and welcome, everyone, to Dyadic's Q3 2025 Conference Call. I hope you have had the opportunity to review Dyadic's press releases announcing financial results for the quarter ended September 30, 2025. You may access our release and Form 10-Q 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 give a review of our Q3 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 question-and-answer 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 involves 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 reports filed with the SEC.

It is now my pleasure to pass the call to our President and COO, Joe Hazelton. Joe?

Thanks, Ping, and thank you all for joining today. The third quarter was another pivotal quarter for Dyadic as we continued our transformation from a platform-centric R&D organization into a commercially focused biotechnology company with a growing portfolio of high-value products. At the start of the fourth quarter, we saw our first commercial bulk sale of a Dyadic-produced protein, marking the beginning of a new chapter in our company's evolution. We expect momentum to build with additional product opportunities emerging in 2025 and accelerating in 2026 as we scale our portfolio and expand our global market reach.

We've now rebranded as Dyadic Applied BioSolutions, launched a redesigned corporate website to enhance commercial engagement, and strengthen our technology foundation with the addition of CRISPR/Cas9 gene editing capabilities through our license with ERS Genomics. This license allows us to accelerate strain optimization, improve productivity, and further increase yields and consistency across our proprietary C1 and Dapibus platforms, directly supporting commercialization and profitability.

At this stage, Dyadic is no longer just a story about potential. It's a story about execution, commercial traction, and growing product revenue. As we move from transformation to execution, our progress in Life Sciences in the Life Sciences segment highlights how Dyadic is now operating as a product company. We are manufacturing and supplying lab-grade material for multiple recombinant proteins, focusing our efforts on near-term product revenue from markets where the need for animal-free, high-performance materials is rapidly expanding.

The cell culture media market represents one of the most dynamic growth areas in biotechnology, supporting biologic manufacturing, cell and gene therapy, and cultivated meat. These markets require consistent animal-free proteins that enable scalability and regulatory confidence while balancing costs, and our protein production platforms deliver on those needs. The recombinant human albumin program, in partnership with Proliant Health and Biologicals, continues to advance toward commercial launch in early 2026. Albumin is a cornerstone protein used across diagnostics, research, and biomanufacturing for stabilizing and transporting biomolecules, and transitioning to recombinant production offers significant advantages in purity, safety, and supply chain reliability. We remain fully aligned with Proliiant as they prepare for market entry.

To date, Dyadic has received a total of $1.5 million in milestone payments from Proliant, including a third payment of $500,000 received in October, and we expect to share in the profits as the albumin products enter the market. This collaboration exemplifies how our platforms enable partners to deliver high-value animal-free proteins at commercial scale. In October, we achieved an important milestone with the first bulk purchase order for a Dyadic-produced protein. Our recombinant bovine fibroblast growth factor, or FGF, is now being sold into the cultured meat market, demonstrating our ability to deliver commercial-grade material at scale and validating the market readiness of our technology.

Looking ahead, in addition to growth factors, our top product priorities are animal-free transferring and DNase1, which are now in active manufacturing and sampling to prepare for commercial launch. Transferrin is a key functional protein in serum-free cell culture media responsible for delivering iron to support healthy cell growth and metabolism. Dyadic is producing both bovine and human recombinant transferrin to serve distinct market segments. Bovine transferrin is designed for cultivated meat and research markets where cost efficiency and scalability are key, while human transferrin is targeted for biopharmaceutical and cell and gene therapy applications, which demand higher specification and regulatory-grade consistency.

Together, these 2 products position Dyadic to compete effectively across complementary ends of the market. Our FGF program continues to advance beyond the cultured meat segment as we target cell and gene therapy manufacturers and suppliers. FGFs are essential growth factors in cell culture formulations, driving cell proliferation and differentiation. We're now expanding sampling and validation activities with additional customers, and interest continues to build as companies look for reliable animal-free sources.

In molecular biology reagents, our RNA-free DNase1 has completed production validation and entered sampling while we work to secure purchase orders. DNase1 is a critical enzyme used in gene therapy, molecular diagnostics, and biopharmaceutical manufacturing to remove unwanted DNA without compromising RNA or protein integrity. Dyadic's ability to supply DNase1 in a high-purity animal-free form directly supports the industry's move toward cleaner, more consistent inputs without increased costs.

These products form a high-margin recurring revenue foundation serving critical and fast-growing life science applications. We're also advancing the development of T7 RNA polymerase and RNase inhibitor products to expand Dyadic's position in the DNA and RNA enzyme market. To further expand our global commercial reach, we recently partnered with Intralink, a leading Asia Pacific business development firm, to accelerate market penetration in Japan and South Korea, 2 of the world's fastest-growing and most advanced markets for cell culture media and molecular biology reagents. Being a lean U.S.-based organization, we look to leverage local expertise and established commercial networks to effectively reach these important markets without the need for significant internal infrastructure or capital investment.

Intralink provides Dyadic with on-the-ground commercial resources and regional experience that allow us to engage manufacturers, distributors and potential partners more directly and efficiently. Through this partnership, we are actively introducing our products, such as transferrin DNase1 and growth factors, as well as our platform technologies to new customers in the Asian region, expanding Dyadic's footprint across key global manufacturing hubs in a cost-effective manner.

Building on our momentum in life sciences, Dyadic is also advancing its commercialization efforts in the Food nutrition segment, another large, fast-growing market where our technology is enabling the transition to animal-free sustainable protein production. The food and nutrition market is undergoing a structural transformation as global food producers shift towards sustainable, functional, and animal-free proteins. This transition is driven by consumer preference, regulatory trends, and supply chain sustainability pressures, and it presents Dyadic with a major opportunity to apply its Dapibus platform to supply recombinant proteins and enzymes at scale.

The animal-free dairy protein market alone is expected to exceed $20 billion by 2035, led by growing demand for precision fermented proteins in infant formula, medical nutrition, and wellness applications. These markets require consistent high-purity proteins that replicate the nutritional and functional properties of traditional dairy ingredients, areas where we believe that Dapibus may provide a competitive edge.

Our recombinant alpha-lactalbumin program advanced meaningfully this quarter. We've entered into a term sheet with a non-animal dairy development partner focused on the infant nutrition market, and we anticipate additional agreements for our alpha-lactalbumin program in 2025. The protein has demonstrated strong performance in product testing and formulation trials, with sampling for research and nutritional applications expected by late 2025 or early 2026. Also in the third quarter, our human lactoferrin program continues to progress with a stable production strain developed and yield optimization underway. Lactoferrin is valued for its antimicrobial and immune-supporting properties and commands premium pricing in both nutritional and wellness markets. We expect sampling for research use in early 2026.

In non-animal dairy enzymes, we received an additional $250,000 milestone payment for enzymes in the third quarter, bringing total license and milestone revenue from this partnership to $1.275 million to date. Scale-up for the first enzyme remains on track for commercial launch in late '25 or early 2026, with a second enzyme candidate advancing towards commercialization under the existing license. Importantly, Dyadic is eligible to receive future royalty payments on commercialized products, creating a recurring revenue opportunity and further validating the commercial value of our technology and partnership model.

As we expand our presence in food nutrition, we're also applying our technology to industrial biotechnology, where Dyadic's enzyme expertise is addressing global demand for more sustainable, efficient, and bio-based manufacturing solutions. Dyadic's Bioindustrial segment continues to demonstrate the scalability, flexibility, and cross-sector relevance of our enzyme technology. Using our Dapibus platform, we're delivering enzyme solutions that replace petrochemical or animal-derived inputs and improve process efficiency across industrial and emerging bio-based markets.

Our collaboration with Fermbox Bio on an enzyme cocktail that converts agricultural residues into fermentable sugars continues to advance and deliver results. Fermbox is a strategic partner for Dyadic with robust manufacturing capabilities across multiple quality grades, which allows us to serve a broader range of industrial and bio-based customers. Initial commercial deliveries have been completed, and sampling is expanding with additional customers in biomass processing, biofuels, and pulp and paper markets.

Under this partnership, Dyadic participates in a 50-50 profit share on sales, creating a scalable and recurring revenue model as the adoption and portfolio grow, and we expect to begin seeing revenues in the first half of 2026. Our cellulosic enzyme technology is also being evaluated in regenerative medicine and tissue engineering through collaborations with pharmaceutical and medical device companies. These efforts demonstrate how Dyadic enzymes can contribute to the development of biomaterials for the rapidly growing market of tissue repair and regeneration, further underscoring the versatility and commercial reach of our technology beyond traditional industrial applications.

In parallel with our commercial initiatives, we continue to advance a select group of partner-funded biopharmaceutical collaborations that extend the reach of our technology into vaccines and antibody production, providing valuable validation and nondilutive funding while we stay focused on near-term product revenue.

I'll now turn the call over to our CEO, Mark Emalfarb, to provide an update on our progress of these partner-funded collaborations. Mark?

Thanks, Joe. Our biopharmaceutical programs are accelerating and delivering meaningful advancements in vaccine and therapeutic protein development for both animal and human health through collaborations supported by the Gates Foundation, the Coalition for Epidemic Preparedness and Innovation, CEPI, and our strategic partnership with Dr. Rino Rappuoli and the Fondazione Biotecnopolo di Siena, FBS, as part of the EUR 170 million EU vaccine hub. We're continuing to validate the power of our C1 protein production platform through nondilutive funding. These efforts are generating strong data that demonstrate C1's ability to rapidly, efficiently, and affordably manufacture high-quality biologics, including vaccines, monoclonal antibodies, and other complex proteins with exceptional productivity and scalability.

Our Gates Foundation program focused on developing low-cost monoclonal antibodies for malaria and RSV have achieved key milestones in both productivity and in initial biological characterization when compared with the same antibody produced using traditional mammalian chill production methods. To date, we've received $2.3 million of $3 million grant. Under our CEPI Fondazione Biotecnopolo di Siena collaboration, Dyadic is eligible for up to an additional $2.4 million in funding to support antigen design, cell line development, and cGMP manufacturing scale-up. This project has already begun to generate encouraging data, including the successful development of another C1-produced H5 influenza antigen by FBS.

Initial results show that the Dyadic's H5 antigen reacts as expected with human monoclonal antibodies. In collaboration with FBS, we're preparing to provide H5 antigen samples for preclinical evaluation with the potential to advance into a funded Phase I trial. Other CEPI-supported programs, including the UVax Bio MERS vaccine and the AdaptVac consortium for broad-spectrum fibovirus and vaccines, are expected to further reinforce C1's ability to deliver rapid, scalable, and cost-effective production solutions.

Our collaboration with the process development unit at the NIAID NIH continues to generate encouraging data that not only supports vaccine development, but also enhances the productivity and consistency of our C1 platform. The insights and process improvements gained from this and other funded programs strengthen C1's broader capabilities, and these can be applied across both our biopharmaceutical and Dapibus non-pharmaceutical platforms. This cross-platform innovation drives future value creation and supports the potential for additional licensing and monetization opportunities in animal and human health. While our internal resources remain focused on generating near-term revenues through high-value nontherapeutic proteins, these externally funded biopharmaceutical programs provide valuable nondilutive funding and global validation of our technology.

With that, I'll now turn the call over to our Chief Financial Officer, Ping Rawson, who will walk you through our third quarter 2025 financial results.

Thank you, Mark. I will now go over our key financial results for the quarter ended September 30, 2025, in more detail. You can find additional information in our earnings press release and Form 10-Q, which we filed earlier today.

Total revenue for the quarter ended September 30, 2025, decreased to $1.165 million compared to $1,958,000 for the same period a year ago. The decrease was due to decreases in research and development revenue of $183,000 and license and milestone revenue of $1.425 million from the Pine agreement and enzyme agreement in 2024. The decrease is offset by an increase in grant revenue of $815,000 from the Gates Foundation and CEPI grant in 2025.

Cost of research and development revenue and cost of grant revenue for the quarter ended September 30, 2025, decreased to $255,000 compared to $396,000 for the same period a year ago. For the quarter ended September 30, 2025, cost of grant revenue from the Gates Foundation and CEPI brands was $769,000 compared to 0 for the same period a year ago. Research and development expenses for the quarter increased to $572,000 compared to $460,000 for the same period a year ago. The increase was driven by a rise in the number of active internal research initiatives undertaken to expedite product development.

G&A expenses for the quarter increased to $1,481,000 compared to $1,298,000 for the same period a year ago. The increase reflected increases in rebranding and business development expenses of $176,000, legal and accounting expenses of $83,000, partially offset by a decrease in share-based compensation expenses of $79,000. Loss from operations for the quarter increased to $1,925,000 compared to $203,000 for the same period a year ago. Net loss for the third quarter of 2025 increased to $1,976,000 or $0.06 per share compared to $203,000 or $0.01 per share for the same period a year ago.

As we reported earlier, on August 1, 2025, the company closed its public offering of 6,052,000 shares of its common stock at a public offering price of $0.95 per share. The net proceeds to the company from the offering were approximately $4.9 million after deducting legal expenses, underwriting discounts and commissions, and other offering expenses. As of September 30, 2025, cash, cash equivalents, restricted cash and cash equivalents, and the carrying value of investment-grade securities, including accrued interest, were approximately $10.4 million compared to $9.3 million as of December 31, 2024.

On October 14, 2025, we received a third and final milestone payment of $0.5 million from Proliant upon meeting a certain productivity threshold, which was now included in the cash balance as of September 30, 2025. For the rest of 2025, we expect to see growth in product revenue in our life sciences and food and nutrition markets as we launch products in cell culture media and molecular biology while maintaining our operating expenses in line with last year.

With that, I will now ask the operator to begin our Q&A session.

[Operator Instructions]. I will now ask the operator to begin our Q&A session, after which Joe Hazelton, our COO, will provide closing remarks. Operator?

[Operator Instructions] First question comes from Matt Hewitt with Craig-Hallum Capital Group.

Maybe first up, and I apologize if I missed this, but earlier this week, you announced a new relationship with -- that's going to grant you access to CRISPR commercial licenses. I'm just curious, what does that bring to your portfolio? How is that going to help you drive incremental growth and sign some new contracts?

Matt, it's Joe. It's a great question. And the license that we signed with ERS Genomics earlier this week actually gives us a more powerful genetic toolbox to accelerate product development, improve optimization yields, both with our internal pipeline, but also with our customers. Having access to the CRISPR technology actually helps our partners for some of them that are like food and nutrition, CRISPR licensing can be somewhat problematic. So us having access to the technology to use in these development programs gives us a competitive advantage in some of these markets, as well as the ability to expand and accelerate our internal programs. So we see this as a great opportunity to enhance the already strong genetic toolbox that we have.

And then maybe a follow-up question. And picking one is tough, but I'll just go with this one. The DNA 1 opportunity. It sounds like you're making progress there. How should we be thinking about that opportunity ramping '26 and beyond? And how big could that ultimately become?

Again, a great question. So the market itself for DNase1 is roughly a $250 million market for recombinant products today. Overall, it's closer to a $1.5 billion market for DNase1 for all methods of production and platforms. So as we look at what we're looking to do, we're targeting distributors, suppliers, and manufacturers for bulk sale opportunities. So we're not going to be manufacturing or selling to like individual institutions in small orders. The goal is, and our focus right now is on securing OEM agreements or broader bulk opportunity. So we expect to see it scale rather rapidly. Obviously, we're getting lab-grade material up first.

And as we start to expand the quality of the material, so moving up to like ISO and even GMP grade, those are very expensive to manufacture. So as we get the initial revenues in, we'll be able to target higher-margin segments. So it will be a slow growth at first, but we anticipate it to be steady, given the expansion of the DNA and RNA products in the market itself. I mean there's a ton of -- not just in mRNA still, but a ton of opportunity in cell and gene therapy as well as other markets where we think we have a great opportunity and advantage given our cost structure in that segment.

Next question, John Vander.

So I wanted to ask about the other relationship that you announced with Intralink in Asia. What characteristics of the customers do you think there will be for the -- for those products there, the DNase1 and the transferin? Will those be academic centers or labs? Or what do you think those customers will be?

John, this is Joe. It's a great question. So the reason we're targeting those markets specifically is that they're experiencing a significant growth in the uptake of these products with cell and gene therapy manufacturers, suppliers, and distributors. There are several new companies and several existing companies that are very large. We're targeting those organizations for purchase orders and bulk purchase orders, and then they would, in turn, supply the end users. We're not looking obviously to become a wholesale distribution network to every supplier or every academic institution, but we want to hit where they're pulling their products from.

And I think, John, one of the things you should keep in mind on all these programs is we're dealing with global markets. And as Joe points out, Japan and Korea are expanding, and they're not in turmoil like in the U.S. So our global presence is paying off. As you know, we are heavily involved in Europe and now in Asia and Japan, of course, in the United States, but India and other countries. So we're kind of like in a lot of ways, protected from what's been going on here in the United States to some degree, and because we really have a global footprint, and we're expanding that global footprint, ThmBox as well.

And that's a great point because in addition, a lot of the companies are worried with regard to the tariff situation. So in Japan and Korea, they are looking to improve their manufacturing capability in the homeland. So obviously, us having the ability to transfer our technology anywhere in the world gives us an advantage. So I think, Mark, you're absolutely right.

Well, they need a lower cost of goods to offset the tariffs to ship back in the U.S. So it's opening up doors that heretofore might have been closed.

Would the tariffs apply to your product? I mean, since it's a technology transfer rather than a product itself crossing the border, would that be something that you'd have to worry about? Or would the customer have to worry about in Japan and Asia, and other places outside the U.S.?

Yes. I think the tariffs would be on the products coming back, not on the technology going out.

Next question, Robert Hoffman with Princeton Opportunity Management.

I just want to dig in a little deeper on the CRISPR ERS agreement. So is that something you had to pay anything upfront, and I'm assuming it might be modest. And then how does it work going forward if you -- let's say discover a system within their genomics and -- are they going to get a royalty on the sales of that? Can you just kind of -- I know you can't give specific numbers, but if you can kind of walk us through how a license agreement like that is structured, I appreciate it.

Well, first of all, to your point, I think Joe did a great job in negotiating the deal with ERS Genomics. You got to remember, we're not cutting and clipping out things going into human bodies. We're improving fungal cell lines to make them more efficient, to make them cleaner, to knock out things that might be problematic, improve qualities. And so I can't get the finances to your point, because it's confidential. But I can assure you, it's nothing like you hear about the CRISPR being used in the pharmaceutical and the medical industry. This is really more about engineering cells and making them home at a higher level faster, quicker, and cheaper than they already are.

So as somebody brought up, I think Matt pointed out earlier, we're expanding the opportunities. Our customers don't have to use CRISPR. We have different technologies. We have a site-specific integration, which can allow you to do things repeatedly from a genotype, from a regulatory perspective. In the life sciences and food and nutrition, we can do random in a lot of ways, random will give you the same result as CRISPR, but CRISPR is a little faster and a little more directed. But if you screen more mutants, you might get to the same point. So it gives us an advantage of time and specific ways to manipulate and modify these cells. So I think I wouldn't worry about the back end because the back end, you more than make up for it. If you get higher productivity, you can afford to pay a little bit of a payment to the ERS Genomics. And it's a great deal for them as well because it's opening the door to a whole new area that here before they couldn't get into.

Next question, John Vandermosten.

My follow-up question is on the infant nutrition product. Is that something new that's being launched? Is the customer trying to differentiate it from an animal-based product or something? I want to see if you can help me understand how that product will be marketed to the end customer.

I think in infant nutrition and medical nutrition, what they're looking to do is basically mimic human breast milk. That's really the -- one of the key focuses. The other is, obviously, they want to mimic bovine milk as well. I think you'll see the bovine products be accepted or recombinant non-animal bovine products will probably be accepted first, because that's a shorter -- I guess, a shorter leak for most consumers and most larger companies to take, because they're currently using an infant formula, they're using bovine source materials. So when it gets to things like infant nutrition, ultimately, the goal would be to mimic human breast milk. That would be the ultimate goal. But having human alpha-lactalbumin, I think you'll see it in like medical nutrition, sports nutrition products, prior to seeing it in infant nutrition. But that is exactly what they're trying to do.

There's only, again, so much like actually naturally derived human breast milk that can be produced in a given year, as well as bovine milk as well. Those are self-limiting, or I won't say unsustainable, but they're very difficult to scale to significant levels in certain cases when you're talking about the purity and consistency you need for something like infant nutrition. So the recombinant proteins themselves give them greater assurance of the product quality and better control of the manufacturing process than you get with animal or even human-derived proteins. So the goal is there. The road map is there. Obviously, getting past some of the regulatory hurdles and then consumer issues as well, that will take some time. But we do see this as a great opportunity.

And just to add a little color to that, just like for Proliant, we've got partners that we're talking to and working with that have decades of experience in this industry. So it's not like we're tackling this on our own. We're aligning our interest with people that actually have the knowledge and the expertise to drive this forward to commercialization. If you think about omega-3, which is kind of a similar thing is used in infant formula, for example, these are multibillion-dollar product opportunities. And DSM paid Martech over $1 billion several years back. And it wasn't too long ago that we had this infant formula shortage. So that was a big deal. But this is a huge opportunity, and we're addressing it not on our own, but in partnership with what we think are some of the smartest people to have the industry experience for decades.

[Operator Instructions] Next question comes from Tony Bowers with IntroAact.

I know the grant business is pretty much of a breakeven proposition initially, but it's great credibility, great visibility, and validation. What do you think the positive endgame could be from the Gates Foundation and CEPI?

Well, the positive endgame could be saving hundreds of thousands, if not millions of lives, and getting rewarded for it financially. So I mean these people have the wherewithal of the Gates Foundation to move this to the clinic. And it isn't just about that. This opens up the door for monoclonal antibody production and development of a faster, quicker, more efficient way, lowering the cost of goods. If this administration wants to do anything, they want efficient, low-cost biologics because you've got Lilly, you got Pfizer, you got Novo, Trump calling into the office, and they're all caving in. But guess what? That's a drop in the bucket compared to what we can do with this platform to drive the cost of biologics down. So there's huge opportunity in the end.

But it's also providing technology and advancements for Dyadic.

Well, in addition, Tony, it also gives us some potential avenues for cell culture media. So on one side of the fence, while we have the capability to produce mAbs, we're producing things like transferrin and growth factors. And when you look at those markets themselves, the growing interest and demand for therapeutic proteins means that there's going to be growing interest in demand for cell culture media of all types. So as we're looking to launch transferrin very quickly here into the cell culture media market, not just for cultured meat, obviously, but we're looking to launch into the CO market, the HEC market, where you need these high-quality, high-purity proteins at a reasonable cost in order to be able to produce some of these more high-value targets like monoclonal antibodies. So it really, to me, it not only validates our platform for biopharmaceutical use, it's giving us potential opportunities for us to get our other products in there as well.

All 3 of the products that you're planning to manufacture under your own name, DNA transfer and growth factor, they're all essentially they have been derisked in terms of production validation. And the CDMO market, there's plenty of choices. That's not a bottleneck for you commercializing these?

No, not today, Tony. It's a great question. Right now, there's plenty of capacity with CDMOs. Obviously, from our standpoint, it's the cost of producing some of these grades that we have to be considered of. But today, we are not finding that type of an issue. The other thing we're trying to do is identify opportunities in market, right? So whether it's Japan or Korea or whether it's in the EU, we're adopting we're trying to bring CDMOs in all different parts of the world, obviously, to reduce our tariff implications and to improve the economics of being able to distribute these products in both. So we haven't seen that to be an issue as of yet.

Last question, if I may. Can you comment on the burn and how much ability you have to do what you need to?

Yes. Tony, this is Ping. We don't normally give the cash guidance, as you know, but as close to the end of the year, as you can see at the third quarter, I think we are still expecting the last quarter to have the recognized the $0.5 million cash in October, we received Proliant. So that will be reflected in the Q4 financials. And also from a business perspective, I think we are still expecting certain product revenue, even though the amount may be not disclosed at this point. So it's really hard to give you the actual cash burn at this point. But we do -- like I said in the script, we do expect the operating expenses will be in line with last year. I hope that helps.

Next question, Robert Hoffman.

Just actually pick up on that question. Moving forward, in terms of like just headcount and expenses, obviously, you're outsourcing a lot of things, especially the marketing and development, although maybe not the development. But what do you see out 2 or 3 years? Are you going to have to expand dramatically? Or is it something that operating leverage is such that you have to increase your cost structure by 50% while revenue goes up multiples of that? Can you give us just some sense of how the business model scales?

Yes. Actually, it scales rather easily, considering the model that we're focusing on is the distributors, wholesalers, and suppliers. So from an infrastructure standpoint, that's not going to require significant amounts of build. So even as we scale, it's really about your manufacturing capacity and getting product to those customers. So that we can do, obviously, through our current outsourced model. So we don't anticipate significant infrastructure changes in the next 2 to 3 years. Now obviously, as we continue to move forward, and if it makes sense to grow in certain areas, we want to take a look at that. But right now, the quickest path to acceleration is more product that we're able to actually produce and get on to the market. So that's really the main focus right now.

So you don't see G&A expense blowing up as your revenue expands. Obviously, it's going to grow, but it's not going to keep pace with your revenue.

There are no further questions. I will now turn the call over to Dyadic President and COO, Joseph Hazelton.

Thank you, everyone. Putting today's call in perspective, we're very encouraged by the progress we're making. While, of course, we want to see larger gains come faster, the indicators for growth are clear. Our pipeline is advancing, customer engagement is increasing, and the foundation for sustained commercial expansion is firmly in place.

Q3 2025 marked a defining step in Dyadic's commercial evolution. With our first bulk order, additional purchase orders underway, multiple product launches approaching, and we're now executing as a product-driven biotechnology company. With the integration of the CRISPR technology, the commercial expansion through Intralink, and strong balance sheet of $10.4 million in cash and investments, Dyadic Applied BioSolutions is well positioned to deliver sustainable revenue and growth and long-term value creation.

In parallel, our legacy biopharmaceutical programs and collaborations continue to advance, providing validation for our technology and the potential for longer-term revenue streams as those programs mature. At the same time, our near-term focus remains on executing the commercial strategy already taking shape across our core markets. Our near-term priorities are clear. First, to accelerate product sales across our Life Sciences and molecular biology reagent portfolio, where early commercial traction is already underway; second, to expand customer engagement in key global markets, including Asia, Europe and North America through targeted partnerships and business development initiatives; and third, to advance commercialization in our Food, Nutrition and Bioindustrial segments where our technology is enabling new sustainable solutions and creating meaningful opportunities for recurring revenue growth.

Dyadic is now executing as a commercial organization built on validated platforms, established partnerships, and a clear path toward recurring revenue and profitability. Thank you for your continued support, and we look forward to updating you on our progress.

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