Dyadic International, Inc. (NASDAQ:DYAI) Q1 2026 Earnings Call Transcript

Dyadic International, Inc. (NASDAQ:DYAI) Q1 2026 Earnings Call Transcript May 14, 2026

Operator: 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.

Ping Rawson: 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?

Joseph Hazelton: 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?

Mark Emalfarb: 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.

Ping Rawson: 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?

Q&A Session

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

Matthew Hewitt: 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?

Joseph Hazelton: 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.

Matthew Hewitt: 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.

Mark Emalfarb: 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.

Joseph Hazelton: 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.

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

John Vandermosten: 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?

Joseph Hazelton: 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.

John Vandermosten: 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?

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

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

Ping Rawson: 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.

Joseph Hazelton: Operator, are there any further questions?

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

Unknown Attendee: 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?

Mark Emalfarb: 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.

Unknown Attendee: 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?

Joseph Hazelton: 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.

Unknown Attendee: 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.

Joseph Hazelton: 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.

Mark Emalfarb: 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.

Joseph Hazelton: 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.

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

Glenn Primack: 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?

Joseph Hazelton: 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?

Mark Emalfarb: 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.

Glenn Primack: 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.

Joseph Hazelton: You certainly will. We’ll be there, Glenn.

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

Tony Bowers: 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.

Joseph Hazelton: 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.

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

Joseph Hazelton: 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?

Mark Emalfarb: 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.

Operator: 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.

Joseph Hazelton: 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.

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