Dyadic International (NASDAQ:DYAI) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=qVNgtGJ6

Summary

Dyadic International reported Q1 2026 revenue of $1.1 million, a 182% increase compared to Q1 2025, mainly driven by higher R&D revenue, grant revenues, and milestone payments.

The company is advancing its strategic transition from a platform technology company to a commercial biotechnology company with multiple revenue streams from products, partnerships, and licensing.

Operational highlights include partnerships with Proliant Health Biologicals and Enzymes, commercial launches of recombinant proteins and enzymes, and increased interest from potential partners and customers.

Strategic initiatives focus on leveraging microbial production platforms for animal-free proteins and enzymes in life sciences and food/nutrition markets.

The company maintains a disciplined approach to cash management, expecting existing resources to provide a cash runway into Q2 2027.

Management emphasized the importance of ongoing biopharmaceutical collaborations for strategic validation and potential future licensing opportunities.

Dyadic International remains focused on scaling product sales, expanding partnerships, and supporting customer adoption while maintaining careful expense management.

Full Transcript

OPERATOR

Good evening and welcome to Dyadic International's Q1 2026 conference call. Currently, all participants are in a 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, 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 (Chief Financial Officer)

Thank you Operator. Good evening and welcome everyone to Dyadic first quarter 2026 conference call. I hope you have had opportunity to review Dyadic press releases announcing financial results for the quarter ended March 31, 2026. You may access our release and form 10Q under the Investors section of the company's [email protected] on today's call, our President and Chief Operating Officer, Joe Hazelson will review our Q1 2026 business and corporate highlights and provide commentary on the strategic direction of the business. Our CEO, Mark E. McFarg 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 and 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. Static 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 Dyadic Report filed with the sec. It is now my pleasure to pass the call to our President and CEO, Joe Hazelson.

Joe Hazelson

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 International is increasingly well positioned for the future. Over the last several years we have worked to transform Dyadic International 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 Biologicals commercial launch of Albufree DX Recombinant Human Albumin for 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, Enzymes has now commercialized recombinant non animal Vogeline chymosin and after successfully achieving developmental milestones, this is another important validation point for our technology and commercialization models. As additional partners bring products to markets, 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 centered around leveraging our proprietary C1 and Dapavis 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 of the many products we target require stable manufacturing, 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 science, we are focused on recombinant proteins and enzyme 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 advancing 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. DNase1 represents another example of how we intend to commercialize products across multiple channels. Together with Fernbox 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 brigbio for development of recombinant bovine alpha lacta albumin is an example of this strategy. Alpha lacta albumin 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 path with its 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 made over the last year meaningfully differentiates the business today from from where it has been historically. Importantly, this evolution also represents a return to Dyadic 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 focus on recombinant proteins and enzymes across life sciences, food and nutrition in 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 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 thank you Joe. While Dyadic's primary commercial focus remains on nonpharmaceutical 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 Biotechnopology 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 $3,000,000 grant program continues advancing low cost monoclonal antibodies targeting RFV 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 Fundazione Biotechnopoliti 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 and vaccine antigens. Beyond these programs we remain engaged across a border 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 DIAC is continuing to build a diversified opportunity set that combines nearer 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 (Chief Financial Officer)

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 10Q, which we filed earlier today. Total revenue for the three 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 per line 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 Enzymes 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. DNA 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 increase in revenue and lower research and development expenses, partially offset by higher costs associated with revenue generating activities and increased G and 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 first quarter of 2026 with approximately 6.6 million in cash, cash equivalent, 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 operators to begin our Q and 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 and A session after which Joe Hazelson will provide closing remarks. Operator

OPERATOR

thank you ladies and gentlemen. If you would like to ask if you would like to remove your question from from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. And the first question comes from the line of Matt Hewitt with Craig Hallam Capital Group. Please proceed.

Matt Hewitt (Equity Analyst)

Good afternoon. Thanks for taking the questions and congratulations on your progress. Maybe first up on the recombinant bovine transferrin in 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

Joe Hazelson

out of the gate? Actually it's a great question Matt, thanks for asking. I anticipate it's going to be steady, but I don't think it'll 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, you know, a steak, that stake gets approved for a specific animal cell line and then obviously they could do, you know, a different animal cell line and another product gets approved. So as these grow, I don't think it'll be sustained growth, but I don't think it'll be, you know, significant. But I think the, the bigger market is also that it's not just cultured meat. Bovine transfer 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 like IBT will be launching this product as well. So we'll start to see revenues coming from other places.

Matt Hewitt (Equity Analyst)

Got it. Super helpful. And then maybe a follow up question for Mark and I think you, you may have hinted at this a little bit in your prepar, 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 huntavirus and I'm just curious if that creates or that presents a similar type opportunity and whether or not you think that C1 could help with potential vaccines for that virus as well. Thank you.

Mark

Yeah, Matt, thanks. That'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 You know, 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 what why we're funding through third parties, cepi, Engage, 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 Reno Rapioli with the foundation Biotechnopole di Siena, we've demonstrated now from the plasmid, once we get a codonophthalmic plasmid with under three weeks, we can have stable cell lines, run fermentations and purification through 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. And the monoclonal antibodies, not just about vaccines, they're really even 10% deadly and people get infected. You need antibodies, you don't need a vaccine. It's too late. And so we can get to those antibody proteins much faster and 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. 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 one study that demonstrated a C1 protein was safe and effective for use in a human application. We also have non human primate studies completed with some monoclonal antibodies. So when you look at de risking 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.

Matt Hewitt (Equity Analyst)

Good point.

OPERATOR

Please proceed.

John

Thank you. 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?

Joe Hazelson

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 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 you know, the mark doesn't have available. We're doing 100 other different things but they give us the capability to keep these customers moving towards, you know, revenue agreements that we don't have internally today, but much more cost effectively and they're well entrenched. They Actually were headquartered 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 helped me from a distribution standpoint also finding out which distributors are ready for these products, which ones we can target, move products faster, and obviously which ones are focused in the same areas that we are, like cell culture media and molecular biology workflows. So it definitely helps us focus our efforts in the right places and supports our activities, our business development activities in those areas.

John

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?

Joe Hazelson

After the support channel essentially, I guess might as well let you know that the product actually shipped this week. So we're shipping our first products which are DNase1 and transferrin. We will have other products that they will be, you know, putting into the channels as well. We'll be looking at things like recombinant alpha lactalbumin, human alpha lactoalbumin for cell culture applications, human transferrin as well. So there'll be multiple products. But we started with DNase1 and bovine transferrin because we're. 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.

John

Okay, thanks Joe. Great, thanks for the follow up ping. The next question was for you. Now that we're coming up on mid year, what's your best guess on cash burn?

Ping Rawson (Chief Financial Officer)

Hi John, good question. I think that's the question everybody interested in. As you see from the press release at the end of March, we have $6.6 million cash equivalent to 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, you know, $5.7 million last year. So we expect the same level if not less than that, which means we'll have enough catch one way into next year this time at least.

John

Okay, thank you. Welcome.

OPERATOR

Operator. Are there Any further questions? No, there are no further questions. And. Oh, well, actually, sorry there we do have a question from Luis Garcia with who is a private investor. Please proceed.

Luis Garcia

How are you doing, guys?

Joe Hazelson

Good, Louis, how are you?

Luis Garcia

Okay, just a couple questions here. I noticed that Codex is 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?

Joe Hazelson

Yeah, we don't have anything that's publicly reportable with Codexis from the past. If you remember, we sold that business due to $575 million. So. There have been discussions in the past, in the recent months of where we might have some benefits for each other.

Luis Garcia

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?

Joe Hazelson

It's in the pipeline. We expect we will see them in 2026. 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.

Luis Garcia

Okay, one more fibro they've been doing, using our products and doing them research and all. Is there any time, sort of, 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 you know, just seeing if we can sort of jump in on that bandwagon with them if they were to throw something our way.

Joe Hazelson

It's a great point. And honestly, it's also an example, 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 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 US Depending on where they're going to, there should be some news flow coming out potentially in 2026, but definitely in 2027 around fibro. And just to add some color, that's been very successful from the technology side, our side in terms of the yield and the performance. And so, you know, 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 and again it's, it's, they're kind of right in the time frame. I mean it takes five to seven years to bring a new product to market in that space. And you know, we signed the deal I think in 2018 and you know, here we are seven years later and they're getting ready to move into clinical phases. So again, it's right on time but just slow, slow.

OPERATOR

From the line of Glenn Primack with Lusa Investment Group, please proceed.

Glenn Primack (Investor)

Good afternoon. I'm guessing like boy, you guys have done 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 phones off the hook with Huntavirus and Joe, everything I've been reading in these trade journals on shortages away 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

Joe Hazelson

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, you know, that does take, you know, a significant amount of time to, you know, get products labeled correctly, make sure they get out the door. But, you know, not something we're 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, you know, 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.

Mark

But it's a great question mark. Yeah, well, I mean I think as Joe pointed out, we just hired IGT to go after the European market because they've done a great job in Japan. And so, you know, we've 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 these cell culture media, DNase1, RNA enzymes, cultured meat, cell and gene therapy, all the things that were launched and have launched and are launching like transferrin and albumin with Reliant, we need More people and we're doing it judiciously. Joe says 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 confidence that we don't have. So this would be a faster way to get to the market.

Glenn Primack (Investor)

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 that biotech show in San Diego in June.

Joe Hazelson

You certainly will. We'll be there. Glenn, thanks. Thank you.

Tony Bowers

And the next question comes from the line of Tony Bowers with Introact. Please proceed. Hey Joe. Yeah. 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.

Joe Hazelson

And Tony, it's a great question and obviously you always have great insight into the market and you're exactly right. The, the demand is, 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, two 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 approval. 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 and 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 scarcity of protein 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 strengths up to the levels necessary to compete in the product market. And that's what we're focused on right now. But but you're 100% right that 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 dwarf cultured meat as a, as a market for the foreseeable future. I mean that's, that's just the way.

Tony Bowers

Which geographies do you think will have the least regulatory problem on the meat side? Honestly, I think the US will probably have the least regulatory one, at least from our standpoint.

Joe Hazelson

We obviously, we have a GRAS certified organism. We got that in 2009. So we're using self affirmed Grasp pathway for these products enzymes. They filed their self affirmed grasp this year and they're already commercializing their bovine chymosin and we'll use the same process for alpha lactalbumin. So I think the US 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

Yeah, and I think that if you recall, you know, BASF has their own grass approvals in the EU and US on the PAT's core technology platform, fuels and chemicals are potentially back in vogue and people paying attention. We can't rely on oil. And so I think that our positioning and with our technology, the Ethibus is ideally suited to turn biomass into sugar. And we've already reentered that space with Firmbox and they and us are trying to expand that as the situation in Gulf continues to fester.

OPERATOR

Thank you. There are no further questions at this time and I will now turn the call back over to Dyadix President and COO Joe Hazelton for closing remarks.

Joe Hazelson

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 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 allowed us to extend our run rate 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.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.