Dyadic International Q3 revenue falls to $449K
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Dyadic International, Inc. (DYAI) reported third-quarter revenue of $449,101, versus $1,164,617 a year earlier, and a net loss of $1,357,041 versus $1,976,012. For the first nine months, net loss was $5,435,608 versus $5,797,365, while cash used in operations was $5,265,532 versus $3,932,110. Cash, cash equivalents, short-term investments and restricted cash totaled $6,038,611 at September 30. A $545,527 net gain from the change in warrant fair value contributed to 2026 results.
Management says recurring losses and negative cash flows raise substantial doubt about Dyadic’s ability to continue as a going concern within one year after the financial statements were issued on November 13, 2026. Its mitigation efforts include financing, grants, commercial sales and licensing, but execution is uncertain; proceeds from the August 2026 offering did not alleviate the doubt. The offering and concurrent warrant placement generated $2,900,000 gross and approximately $2.3 million net. A securities purchase agreement limits new equity issuance through December 17, 2026, absent investor consent or exceptions, and Dyadic cannot currently sell under its ATM program. Nasdaq cited minimum bid price, market value and stockholders’ equity deficiencies; the compliance period for the first two ends March 24, 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter net loss was $1,357,041, versus $1,976,012 a year earlier.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Management cites substantial doubt within one year about continuing as a going concern.
- Moderate pointThird-quarter revenue was $449,101, versus $1,164,617 a year earlier.
- Moderate pointOperating cash used was $5,265,532, versus $3,932,110 for the first nine months.
Filing Explained
At September 30, 2026, $1,464,821 of the $6,038,611 cash-and-investment total was restricted; the amount excluding restricted cash was $4,573,790.
In its Form 10-Q, Dyadic reports that the registered direct offering closed on
At
Key Figures
Key Terms
substantial doubt financial
held-to-maturity financial
warrant liability financial
performance obligation financial
baby shelf rules regulatory
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were the terms of DYAI's August 2026 offering?
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AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission
File Number:
(Exact Name of Registrant as Specified in its Charter)
State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification No. |
| Address of Principal Executive Offices | Zip Code |
Registrant’s Telephone Number, Including Area Code
N/A
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The number of shares outstanding of the registrant’s common stock as of November 12, 2026 was .
TABLE OF CONTENTS
| Page | ||
| PART I FINANCIAL INFORMATION | 3 | |
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 41 |
| Item 4. | Controls and Procedures | 41 |
| PART II OTHER INFORMATION | 42 | |
| Item 1. | Legal Proceedings | 42 |
| Item 1A. | Risk Factors | 42 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 43 |
| Item 3. | Defaults Upon Senior Securities | 43 |
| Item 4. | Mine Safety Disclosures | 43 |
| Item 5. | Other Information | 43 |
| Item 6. | Exhibits | 44 |
| Signatures | 45 | |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the federal securities laws, particularly under Item 2 “Management’s Discussion and Analysis.” All statements other than statements of historical fact are forward-looking. Examples of forward-looking statements include, but are not limited to, statements regarding industry prospects, future business, future results of operations or financial condition, future liquidity and capital resources, our ability to implement our agreements with third parties, management strategies, and our competitive position. Forward-looking statements generally can be identified by use of the words “expect,” “should,” “intend,” “anticipate,” “will,” “project,” “may,” “might,” “potential,” or “continue” and other similar terms or variations of them or similar terminology. Dyadic International, Inc., and its subsidiaries caution readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such statements reflect the current views of our management with respect to our operations, results of operations and future financial performance.
Forward-looking statements involve many risks, uncertainties, or other factors beyond Dyadic’s control. These factors include, but are not limited to (i) our history of net losses, and management’s related conclusion that there is substantial doubt about our ability to continue as a going concern for 12 months following November 13, 2026, the date the financial statements are issued; (ii) market and regulatory acceptance of our microbial protein production platforms and other technologies; (iii) failure to commercialize our microbial protein production platforms or our other technologies; (iv) competition, including from alternative technologies; (v) the results of nonclinical studies and clinical trials; (vi) our capital needs and the dilutive impact of a capital raise to mitigate our going-concern risk; (vii) changes in global economic and financial conditions; (viii) our reliance on information technology; (ix) our dependence on third parties; (x) government regulations and environmental, social and governance issues; (xi) intellectual property risks; (xii) our ability to comply with the listing standards of the Nasdaq Stock Market LLC (“Nasdaq”); and (xiii) other factors discussed in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in this Quarterly Report and in our annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 25, 2026, as amended on April 30, 2026 (the “Annual Report”). We caution you that the foregoing list of important factors is not exclusive. Any forward-looking statements are based on our beliefs, assumptions, and expectations of future performance, considering the information currently available to us. Before investing in our common stock, investors should carefully read the information set forth under the caption “Risk Factors” and elsewhere in this Quarterly Report, in our Annual Report and in our other SEC filings, which could have a material effect on our business, results of operations and financial condition. The forward-looking statements contained in this Quarterly Report are made only as of the date hereof, and except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations.
| 2 |
PART I
Item 1. Financial Statements
DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investment securities | ||||||||
| Restricted cash | ||||||||
| Interest receivable | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Operating lease right-of-use asset, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred research and development obligations | ||||||||
| Operating lease liability | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related party | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Convertible notes, net of issuance costs | ||||||||
| Convertible notes, net of issuance costs - related party | ||||||||
| Warrant liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 5) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ par value: | ||||||||
| Authorized shares - ; issued and outstanding | ||||||||
| Common stock, $ par value: | ||||||||
| Authorized shares - ; issued shares - and , outstanding shares - and as of September 30, 2026, and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock shares held at cost - | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ (deficit) equity | ( | ) | ||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 3 |
DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue: | ||||||||||||||||
| Research and development revenue | $ | $ | $ | $ | ||||||||||||
| Grant revenue | ||||||||||||||||
| License and milestone revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Costs and expenses: | ||||||||||||||||
| Costs of research and development revenue | ||||||||||||||||
| Costs of grant revenue | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Foreign currency exchange (gain) loss, net | ||||||||||||||||
| Total costs and expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - related party | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of warrant liability, net of issuance costs of $ | ||||||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss per common share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Basic and diluted weighted-average common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Nine months ended September 30, 2026 | ||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| January 1, 2026 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||
| Stock-based compensation expense | — | — | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | |||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| March 31, 2026 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation expense | — | — | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| June 30, 2026 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation expense | — | — | ||||||||||||||||||||||||||
| Issuance of common stock in registered direct offering, net of offering costs of $ | — | |||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | ( | ) | |||||||||||||||||||||||||
| Disgorgement to Company of short-swing profits, net of costs | — | — | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| September 30, 2026 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| January 1, 2025 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||
| Stock-based compensation expense | — | — | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | |||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | |||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| March 31, 2025 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||
| Stock-based compensation expense | — | — | ||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | ( | ) | |||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| June 30, 2025 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation expense | — | — | ||||||||||||||||||||||||||
| Issuance of common stock, net of offering costs of $ | — | |||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| September 30, 2025 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine months ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation expense | ||||||||
| Amortization of held-to-maturity securities, net | ( | ) | ( | ) | ||||
| Change in fair value of warrant liability, net of issuance costs | ( | ) | ||||||
| Amortization of debt issuance costs | ||||||||
| Foreign currency exchange (gain) loss, net | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Interest receivable | ( | ) | ||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Operating lease assets and liabilities | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Accrued interest | ( | ) | ||||||
| Accrued interest - related party | ( | ) | ||||||
| Deferred research and development obligations | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchases of held-to-maturity investment securities | ( | ) | ( | ) | ||||
| Proceeds from maturities of investment securities | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from exercise of stock options | ||||||||
| Proceeds from issuance of common stock and warrants, net of issuance costs paid | ||||||||
| Disgorgement to Company of short-swing profits, net of costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | ( | ) | ||||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Vesting of restricted stock units | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental noncash investing and financing information | ||||||||
| Unpaid offering costs included in accounts payable and accrued expenses | $ | $ | ||||||
| Purchase and assignment of convertible note by related party | $ | $ | ||||||
| Fair value of warrants issued in connection with the offering | $ | $ | ||||||
| Right-of-use asset obtained in exchange for operating lease liability | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 6 |
Notes to Consolidated Financial Statements
Note 1: Organization and Summary of Significant Accounting Policies
Description of Business
Dyadic International, Inc. (“Dyadic”, “we”, “us”, “our”, or the “Company”) d/b/a Dyadic Applied BioSolutions, is a global biotechnology platform company headquartered in Jupiter, Florida, with operations in the U.S. and the Netherlands. We develop and commercialize scalable, non-animal protein production platforms to meet growing global demand across the life sciences, food and nutrition, and bio-industrial markets.
Effective August 1, 2025, we are doing business as Dyadic Applied BioSolutions. This rebranding initiative marks a strategic transition from a research-driven organization to a commercially focused enterprise. The new name and visual identity better reflect the emphasis on delivering applied biotechnology solutions through our patented and proprietary Dapibus™ and C1 protein production platforms.
Our proprietary platforms—Dapibus™ and C1—are designed for rapid, cost-effective, and flexible production of high-value proteins, enabling partners to reduce development timelines and manufacturing costs. Our focus is to commercialize high-value, non-therapeutic proteins in the life sciences, food, nutrition and industrial bioprocessing sectors. These proteins avoid the regulatory complexity and high costs associated with therapeutic biologics, enabling faster time to revenue, broader market reach, and long-term supply agreements. Our recent significant milestones across both food and nutrition as well as fully funded legacy collaborations, such as with the Gates Foundation, underscore our strategic shift to revenue-focused bioprocessing protein platforms from therapeutic and vaccine development.
Liquidity and Capital Resources
In accordance with FASB Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern (“Topic 205-40”), management is required to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within 12 months from the issuance date of the Company’s financial statements. This initial evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the consolidated financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
As
of September 30, 2026, total cash amounted to $
The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The continuation of the Company as a going concern is primarily dependent upon the ability of the Company to obtain debt or equity financing to continue operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
| 7 |
To mitigate the conditions raising substantial doubt about our ability to continue as a going concern, management is pursuing: (i) securing additional capital, potentially through a combination of public or private equity offerings or other financings, subject to the limitations described below; (ii) applying for several grant fundings from various organizations; (iii) expanding commercial product sales, which began on a pilot basis in the third quarter of 2026; and/or (iv) obtaining licensing revenue from several interested parties.
There
is no certainty that we will be able to execute on these plans in a timely fashion or at all. Our ability to raise additional
capital is currently limited.
On
March 8, 2024, the Company issued an aggregate principal amount of $
The
Convertible Notes are senior, secured obligations of Dyadic and its affiliates, and interest is payable quarterly in cash on the principal
amount equal to
During
the year ended December 31, 2024, $
On May 1, 2025, the Company amended the Convertible Notes to extend the Redemption Date (as defined in the Convertible Notes) to December 1, 2026. The holders’ redemption right was subsequently eliminated by the December 23, 2025 amendment described below, except in the case of an Event of Default.
On
September 15, 2025, the Company amended the security agreement to reflect updates to the Secured Parties (as defined in the Security
Agreement) thereunder, including the addition of a trust for the benefit of the Company’s Chief Executive Officer, Mark Emalfarb,
as a result of his purchase and assignment to him of one of the Notes from an existing note holder in a principal amount of $
On
December 23, 2025, the Company entered into an additional amendment to the Convertible Notes, pursuant to which (i) the Maturity Date
(as defined in the Convertible Notes) was extended from March 8, 2027 to December 31, 2027, (ii) the conversion price at which the Convertible
Notes are convertible into shares of the Company’s common stock was set at $
| 8 |
The Convertible Notes contain customary covenants, and the Securities Purchase Agreement relating to the Convertible Notes also contains certain affirmative and negative covenants (including, without limitation, restrictions on our ability to incur indebtedness, permit liens, make dividends or certain debt payments or consummate certain affiliate transactions). The Company was in compliance with its covenants with respect to the Convertible Notes as of September 30, 2026.
On
November 16, 2024, Dyadic entered into an agreement with the Gates Foundation (the “Gates Foundation,” formerly known as
the Bill and Melinda Gates Foundation) relating to a grant in the amount of $
On
March 20, 2025, the Company received a funding award (the “CEPI Grant”) from the Coalition for Epidemic Preparedness Innovations
(“CEPI”) to advance Dyadic’s C1 platform through a $
On
August 1, 2025, the Company completed an underwritten offering of shares of the Company’s common stock (the “Offering”)
pursuant to an underwriting agreement, dated July 30, 2025, between the Company and Craig-Hallum Capital Group LLC (“Craig-Hallum”).
The public offering price in the Offering was $ per share of common stock. The net proceeds to the Company from the Offering were
approximately $
On
March 6, 2026, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Craig-Hallum
as sales agent (the “Sales Agent”), pursuant to which the Company may offer and sell from time to time, at its option, shares
of the Company’s common stock having an aggregate offering price of up to $
On
August 13, 2026, the Company entered into a common stock purchase agreement with an institutional investor relating to the
issuance and sale of
shares of the Company’s common stock at a purchase price of $
per share in a registered direct offering (the “2026 Offering”) under the Company’s then-effective shelf
registration statement on Form S-3. The closing occurred on August 14, 2026. Aegis Capital Corp. acted as sole placement agent and
received a cash fee equal to
| 9 |
Concurrently
with the 2026 Offering, the Company issued and sold to the same investor, in a private placement exempt from registration under Section
4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 thereunder, warrants to purchase an aggregate of
The exercise price
of the Common Warrants is subject to customary adjustments for stock splits, stock dividends and similar events. The Common Warrants
may be exercised for cash or, if no registration statement covering the shares issuable upon exercise is effective at the time of exercise,
on a cashless (net exercise) basis.
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements, including the accounts of the Company and its wholly owned subsidiaries, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as found in the Accounting Standards Codification (“ASC”), Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in consolidated financial statements have been condensed or omitted pursuant to such rules and regulations. All significant intra-entity transactions and balances have been eliminated in consolidation. The information included in this Quarterly Report should be read in conjunction with the audited consolidated financial statements and footnotes as of and for the year ended December 31, 2025, included in our Annual Report.
In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments and the accounting for the Common Warrants issued in August 2026 (see “Warrant Liability” below), considered necessary for a fair presentation of all periods presented. The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.
Revision of Prior Period Amounts
Certain prior period amounts have been revised to correct immaterial errors and enhance comparability, including the basic and diluted weighted-average common shares outstanding and net loss per common share; the potentially dilutive securities excluded from the computation of diluted net loss per share, which now include the shares issuable upon conversion of the Convertible Notes; the revenue concentration disclosures; the accumulated amortized debt issuance costs; and the supplemental non-cash disclosure of the vesting of restricted stock units, as of and for the three and nine months ended September 30, 2025. We have evaluated the historical presentation in our previously issued quarterly financial statements for such period and concluded the disclosure errors are immaterial. The revisions had no impact on previously reported total revenues, total costs and expenses, or net loss.
Segment Information
Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or CODM, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s senior management team that includes the Chief Executive Officer, President & Chief Operating Officer, and Chief Financial Officer. The Company views its operations as and manages its business in one operating segment, which is the business of developing and commercializing recombinant protein products using the Company’s proprietary microbial platforms, including Dapibus™ and C1. Segment information is further described in Note 8 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.
Use of Estimates
The preparation of these consolidated financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amount of assets and liabilities and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the applicable period. Estimates inherent in the preparation of these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, stock-based compensation expense, warrants, and income taxes. The Company bases its estimates on historical experience and other market specific or other relevant assumptions it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts, and experience. Actual results may differ from these estimates under different assumptions or conditions. Such differences could be material to the consolidated financial statements.
| 10 |
Concentrations and Credit Risk
The Company’s financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, investment securities, and accounts receivable. At times, the Company has cash, cash equivalents, and investment securities at financial institutions exceeding the Federal Depository Insurance Company (“FDIC”) and the Securities Investor Protection Corporation (“SIPC”) insured limit on domestic currency and the Netherlands’ FDIC counterpart for foreign currency. The Company currently deals with four reputable financial institutions and has not experienced any losses in those accounts.
For
the three months ended September 30, 2026 and 2025, the Company’s revenue was generated from nine and six customers, respectively.
For the nine months ended September 30, 2026 and 2025, the Company’s revenue was generated from fourteen and ten customers, respectively.
Significant customers are those that account for greater than 10% of the Company’s revenue. For the three months ended September
30, 2026 and 2025, two and three significant customers accounted for $
The
Company conducts operations in the Netherlands through its foreign subsidiary and generates a portion of its revenue from customers that
are located outside of the United States. For the three months ended September 30, 2026 and 2025, the Company had five and three customers
outside of the United States (i.e., European and New Zealand customers) that accounted for $
As
of September 30, 2026 and December 31, 2025, the Company had four and two customers outside of the United States (i.e., European and
Asian customers) that accounted for $
The
Company uses several contract research organizations (“CROs”) to conduct its research projects. For the three months ended
September 30, 2026 and 2025, two and one CROs accounted for $
Cash and Cash Equivalents
We treat highly liquid investments with original maturities of three months or less when purchased as cash equivalents, including money market funds, which are unrestricted for withdrawal or use.
Investment Securities
The Company’s investment policy requires investment securities to be investment grade and held to maturity with the primary objective to maintain a high degree of liquidity while maximizing yield. The Company invests excess cash balances in short-term and long-term investment grade securities. Short-term investment securities mature within twelve (12) months or less, and long-term investment securities mature over twelve (12) months from the applicable reporting date. Management determines the appropriate classification of each investment at the time of purchase and reevaluates the classifications at each balance sheet date.
| 11 |
The Company classifies its investments in debt securities as held-to-maturity. Held-to-maturity securities are those securities that the Company has the ability and intent to hold until maturity. Held-to-maturity securities are recorded at amortized cost, net of allowance for credit losses if applicable, and adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized over the life of the related held-to-maturity security. When a debt security is purchased at a premium, both the face value of the debt and premium amount are reflected as investing outflow.
The Company measures expected credit losses on held to maturity debt securities on an individual security basis. The estimate of expected credit losses considers historical credit information from external sources. An allowance for expected credit losses, if any, is recorded against the amortized cost basis, and changes in the allowance are recognized in the consolidated statements of operations in the period in which they occur.
The Company classifies its investments in money market funds as available-for-sale securities and presents them as cash equivalents on the consolidated balance sheets. As of September 30, 2026 and December 31, 2025, all our money market funds were invested in U.S. Government money market funds, for which the risk of loss is minimal.
As of September 30, 2026, and December 31, 2025, the Company did not have any investment securities classified as trading.
Restricted Cash
Restricted cash represents amounts subject to restrictions under an agreement with the Gates Foundation. These funds may need to be refunded and are limited to use as specified in the agreement. The restrictions on these funds lapse as the Company fulfills its obligations under the agreement. Amounts expected to be used within the next twelve (12) months are classified as current.
Accounts Receivable
Accounts receivable consists of billed receivables currently due from customers and unbilled receivables. Unbilled receivables represent the excess of contract revenue (or amounts reimbursable under contracts) over billings to date. Such amounts become billable in accordance with the contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project.
Accounts
receivable are stated net of an allowance for credit losses, if deemed necessary based on the Company’s evaluation of collectability
and potential credit losses. Management assesses the collectability of its accounts receivable using the specific identification of account
balances and considers the credit quality and financial condition of its significant customers, historical information regarding credit
losses and the Company’s evaluation of current and expected future economic conditions and changes in our customer collection trends.
If necessary, an allowance for credit losses is recorded against accounts receivable such that the carrying value of accounts receivable
reflects the net amount expected to be collected. Accounts receivable balances are written off against the allowance for credit losses
when the potential for collectability is considered remote. Substantially all our accounts receivable were current and include unbilled
amounts that will be billed and collected over the next twelve (12) months. Management determined that
Accounts receivable consists of the following:
| September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Billed receivable | $ | $ | ||||||
| Unbilled receivable | ||||||||
| $ | $ | |||||||
| 12 |
Accounts Payable
Accounts payable consist of the following:
| September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Research and development expenses | $ | $ | ||||||
| Legal and professional expenses | ||||||||
| Other | ||||||||
| $ | $ | |||||||
Accrued Expenses
Accrued expenses consist of the following:
| September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Research and development expenses | $ | $ | ||||||
| Employee wages and benefits | ||||||||
| Legal expenses | ||||||||
| Other | ||||||||
| $ | $ | |||||||
Deferred Financing Costs
Deferred financing costs represent costs incurred in connection with the issuance of debt instruments and equity financings. Deferred financing costs related to the issuance of debt are amortized over the term of the financing instrument using the effective interest method and are presented in the consolidated balance sheets as an offset against the related debt. Offering costs from equity financings are netted against the gross proceeds received from the equity financings. See Note 4 for the amortization amount.
Revenue Recognition
The Company has launched an initial portfolio of research-use-only products for direct sales. Early-stage manufacturing is ongoing and initial shipments of product samples for evaluation and qualification purposes to distribution partners are underway. The Company also participates in the commercialization of products developed and launched by third-party collaborators, from which it is entitled to a share of revenue or profits.
For the three and nine months ended September 30, 2026, revenue from product sales was generated from initial sales of research-use-only products and the amounts were not material. Therefore, the product revenue was included in the research and development revenue in the consolidated statements of operations. Revenue from product sales is recognized at a point in time when control of the products transfers to the customer, generally upon shipment. Product samples shipped to distribution partners and prospective customers for evaluation and qualification purposes do not generate revenue. Other than these initial product sales, our revenue to date has been research revenue from third-party collaborations and grants, as well as revenue from sublicensing agreements and collaborative arrangements, which may include upfront payments, options to obtain a license, payment for research and development services, milestone payments and royalties, in the form of cash or non-cash considerations (e.g., minority equity interest).
Revenue related to research collaborations and agreements: The Company typically performs research and development services as specified in each respective agreement on a best-efforts basis, and recognizes revenue from research funding under collaboration agreements in accordance with the 5-step process outlined in ASC Topic 606 (“Topic 606”): (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We recognize revenue when we satisfy a performance obligation by transferring control of the service to a customer in an amount that reflects the consideration that we expect to receive. Depending on how the performance obligation under our license and collaboration agreements is satisfied, we recognize the revenue either at a point in time or over time by using the input method under Topic 606 to measure the progress toward complete satisfaction of a performance obligation.
| 13 |
Under the input method, revenue will be recognized based on the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company believes that the cost-based input method is the best measure of progress to reflect how the Company transfers its performance obligation to a customer. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the performance obligation. These costs consist primarily of full-time equivalent effort and third-party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations.
A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified, and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.
Revenue related to grants: The Company receives grants from governments, agencies, and other private and not-for-profit organizations. These grants are intended to be used to partially or fully fund the Company’s research collaborations. However, most, if not all, of such potential grant revenue, when received, is expected to be earmarked for third parties to advance the research required, including preclinical and clinical trials. Revenue related to grants is presented on a gross basis on the Consolidated Statements of Operations.
Revenue related to sublicensing agreements: If the sublicense to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when technology is transferred to the customer and the customer can use and benefit from the license.
Customer options: If the sublicensing agreement includes customer options to purchase additional goods or services, the Company will evaluate if such options are considered material rights to be deemed as separate performance obligations at the inception of each arrangement.
Milestone payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Company evaluates whether the achievement of the milestones is considered probable and estimates the amount to be included in the transaction price. If the milestone payment is in exchange for a sublicense and is based on the sublicensee’s subsequent sale of the product, the Company recognizes milestone payment by applying the accounting guidance for royalties.
Royalties: With respect to licenses deemed to be the predominant item to which the sales-based royalties relate, including milestone payments based on the level of sales, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty relates has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its sublicensing arrangements.
We
invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenue
is recognized. When there is a timing difference between when we invoice customers and when revenue is recognized, we record either a
contract asset (unbilled accounts receivable) or a contract liability (deferred research and development obligations), as appropriate.
If upfront fees or considerations related to a sublicensing agreement are received prior to the technology transfer, the Company will
record the amount received as deferred revenue from the licensing agreement. As of September 30, 2026, deferred research and development obligations of $
| 14 |
Research and Development Costs
Research and development (“R&D”) costs are expensed as incurred. R&D costs are for the Company’s internally funded pharmaceutical programs and other governmental and commercial projects.
Research and development costs consist of personnel-related costs, facilities, research-related overhead, services from independent contract research organizations, and other external costs. Research and development costs, for the three and nine months ended September 30, 2026 and 2025 were as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Outside contracted services | $ | $ | $ | $ | ||||||||||||
| Personnel related costs | ||||||||||||||||
| Facilities, overhead and other | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Foreign Currency Transaction Gain or Loss
The Company and its foreign subsidiary use the U.S. dollar as their functional currency and initially measure the foreign currency denominated assets and liabilities at the transaction date. Monetary assets and liabilities are then re-measured at exchange rates in effect at the end of each period, and property and non-monetary assets and liabilities are carried at historical rates.
Fair Value Measurements
The Company applies fair value accounting for certain financial instruments that are recognized or disclosed at fair value in the financial statements. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
| ● | Level 1 – Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| ● | Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
The Company’s financial instruments include cash, cash equivalents, restricted cash, investment in debt securities, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred research and development obligations, deposits, warrants, and the Convertible Notes. The carrying amount of these financial instruments, except for warrants and investment in debt securities and Convertible Notes, approximates fair value due to the short-term maturities of these instruments. The Company’s short-term and long-term investments in debt securities are recorded at amortized cost, and their estimated fair value amounts are provided by the third-party broker service for disclosure purposes. See “Warrant Liability” below and Notes 6 and 7 for additional information related to warrants.
| 15 |
Warrant Liability
The
Common Warrants issued on August 14, 2026 (see Note 7) are classified as a liability and measured at fair value on a recurring basis
using the Black-Scholes-Merton option pricing model. The warrant liability is classified within Level 3 of the fair value hierarchy because
the expected volatility assumption requires significant judgment, including the selection of the historical look-back period, and is
derived from the Company’s own historical share price data rather than from observable market inputs. The warrant liability is
remeasured at fair value at each reporting date until the Common Warrants are exercised, expire or are otherwise settled, and is presented
as a non-current liability. The
| Balance at beginning of period | $ | |||
| Issuance of Common Warrants on August 14, 2026 | ||||
| Change in fair value (gain), before issuance costs | ( | ) | ||
| Balance at September 30, 2026 | $ |
The significant inputs used to measure the fair value of the Common Warrants were as follows:
| August 14, 2026 | September 30, 2026 | |||||||
| Stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Remaining contractual term (in years) | ||||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected dividend yield | % | % | ||||||
| Fair value per warrant | $ | $ | ||||||
Expected
volatility is the significant unobservable input in the valuation. An increase (decrease) in expected volatility would increase (decrease)
the fair value of the warrant liability, and a change in the Company’s share price would have the same directional effect. The decrease in the fair value of the Common Warrants from $
Expected volatility is based on the historical volatility of the Company’s daily closing share price over the five years ending on the valuation date, which approximates the contractual term of the Common Warrants. The risk-free interest rate is the U.S. Treasury constant-maturity yield interpolated to the remaining term, and the expected dividend yield is zero. The Common Warrants contain a fundamental transaction provision (see Note 7) under which the holder may require a cash payment equal to a Black-Scholes Value calculated using a volatility of not less than 100%.
Income Taxes
For
the nine months ended September 30, 2026, there was
We recognize all share-based payments to employees, consultants, and our Board of Directors (the “Board”), as non-cash compensation expense, in research and development expenses or general and administrative expenses in the consolidated statements of operations based on the grant date fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are recorded as they occur.
| 16 |
For performance-based awards, the Company recognizes related stock-based compensation expenses based upon its determination of the potential likelihood of achievement of the specified performance conditions at each reporting date.
Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common stock shares outstanding during the reporting period. Diluted net loss per share adjusts the weighted average number of common stock shares outstanding for the potential dilution that could occur if common stock equivalents, such as stock options, were exercised and converted into common stock, calculated by applying the treasury stock method.
For the three and nine months ended September 30, 2026, a total of shares of potentially dilutive securities, including shares of unvested restricted stock units, stock options to purchase shares of common stock, stock warrants to purchase shares of common stock, and shares issuable upon conversion of the Convertible Notes, were excluded from the computation of diluted net loss per share as their effect would have been anti-dilutive.
For the three and nine months ended September 30, 2025, a total of shares of potentially dilutive securities, including shares of unvested restricted stock units, options to purchase shares of common stock, stock warrants to purchase shares of common stock, and shares issuable upon conversion of the Convertible Notes, were excluded from the computation of diluted net loss per share as their effect would have been anti-dilutive.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides entities with a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers (“ASC 606”) by allowing the assumption that current conditions as of the balance sheet date will not change during the remaining life of the asset. The Company adopted ASU 2025-05 for the quarter ended March 31, 2026, and explicitly elected the practical expedient to assume that current conditions remain unchanged. The adoption of ASU 2025-05 does not have any material impact on the Company’s results of operations, financial position or liquidity or its related financial statement disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 clarifies the requirements for determining whether the settlement of a convertible debt instrument on terms that differ from its original conversion terms is accounted for as an induced conversion or as a debt extinguishment. The Company adopted ASU 2024-04 on January 1, 2026 on a prospective basis. The adoption of ASU 2024-04 did not have a material impact on the Company’s consolidated financial statements or related disclosures, as there were no conversions of the Convertible Notes during the nine months ended September 30, 2026.
Other Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 enhances the disclosures about an entity’s expenses by requiring more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies and reorganizes existing interim reporting guidance, including the scope of Topic 270 and interim disclosure requirements, and introduces a disclosure principle requiring entities to disclose material events or changes occurring since the most recent annual reporting period. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-11 on its consolidated financial statements and related disclosures.
| 17 |
Other recent authoritative guidance issued by the FASB (including technical corrections to the Accounting Standards Codification) and the SEC did not or are not expected to have a material effect on the Company’s consolidated financial statements or related disclosures.
Note 2: Cash, Cash Equivalents, and Investments
The Company’s investments in debt securities are classified as held-to-maturity and are recorded at amortized cost, net of allowance for credit losses, and its investments in money market funds are classified as available-for-sale securities and presented as cash equivalents or restricted cash on the consolidated balance sheets. The following table shows the Company’s cash, available-for-sale securities, and investment securities by major security type as of September 30, 2026, and December 31, 2025:
| September 30, 2026 (Unaudited) | ||||||||||||||||||||||
| Level (1) | Fair Value | Allowance for Credit Losses | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Adjusted Cost | |||||||||||||||||
| Assets: | ||||||||||||||||||||||
| Cash deposits | 1 | $ | $ | $ | $ | $ | ||||||||||||||||
| Money market funds (2) | 1 | |||||||||||||||||||||
| Short-term investment in corporate bonds (3)(4)(5) | 2 | ( | ) | |||||||||||||||||||
| Total financial assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
| Reconciliation to cash, cash equivalents and investments on consolidated balance sheet | ||||||||||||||||||||||
| Minus: Restricted cash | ( | ) | ||||||||||||||||||||
| Total cash, cash equivalents and investments | $ | |||||||||||||||||||||
| December 31, 2025 (Audited) | ||||||||||||||||||||||
| Level (1) | Fair Value | Allowance for Credit Losses | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Adjusted Cost | |||||||||||||||||
| Assets: | ||||||||||||||||||||||
| Cash deposits | 1 | $ | $ | $ | $ | $ | ||||||||||||||||
| Money market funds (2) | 1 | |||||||||||||||||||||
| Short-term investment in corporate bonds (3)(4)(5) | 2 | ( | ) | |||||||||||||||||||
| Total financial assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
| Reconciliation to cash, cash equivalents and investments on consolidated balance sheet | ||||||||||||||||||||||
| Minus: Restricted cash | ( | ) | ||||||||||||||||||||
| Total cash, cash equivalents and investments | $ | |||||||||||||||||||||
| 18 |
Notes:
| (1) |
| ● | Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities | |
| ● | Level 2 - Other inputs that are directly or indirectly observable in the markets | |
| ● | Level 3 - Inputs that are generally unobservable |
| (2) | |
| (3) | |
| (4) | |
| (5) |
Note 3: Grants, Research Collaboration Agreements, and License Agreements
Gates Foundation Grant
In
November 2024, the Company was awarded the Gates Foundation Grant in the amount of $
The Company is required to apply the funds it receives under the agreements solely toward direct costs for the applicable funded projects, other than less than 15% of such funds, which may apply toward general overhead and administrative expenses that support the entire operations of the Company. The Company receives funding in advance and tracks and reports eligible expenses incurred to the Gates Foundation. Funds received in advance that have not yet been spent are recorded as restricted cash and as deferred research and development obligations in the Company’s consolidated balance sheets. As the Company incurs costs associated with research and development related to the project, monthly, the Company reclasses amounts from the grant to recognize grant revenue and cost of grant revenue. The deferred research and development obligations also include grant funds spent but not yet expensed in accordance with GAAP. The grant agreements include the Gates Foundation’s discretionary termination provisions. Any grant funds that have not been used or committed to the funded project must be returned promptly to the Gates Foundation upon expiration or termination of the agreement.
For
the three and nine months ended September 30, 2026, the Company recognized grant revenue of $
As
of September 30, 2026, the Company received the full Gates Foundation Grant of $
Coalition for Epidemic Preparedness Innovations (CEPI) Grant
On
March 20, 2025, the Company received a funding award from CEPI to advance Dyadic’s C1 platform through a $
| 19 |
For
the three and nine months ended September 30, 2026, the Company recognized grant revenue of $
Proliant
On
June 27, 2024, the Company entered into a License and Development Agreement (the “Proliant Agreement”) with Proliant
Biologicals, LLC d/b/a Proliant Health and Biologicals (“Proliant”), pursuant to which, Proliant will license Dyadic’s
proprietary fungal microbial expression and production platforms and microbial strains for the production of recombinant serum albumin,
for an initial period of
On
October 14, 2025, the Company achieved the productivity threshold and received the final milestone payment of $
As
of December 31, 2025, the Company has recognized $
Upon commencing commercial sales of animal-free recombinant serum albumin products, the Company anticipates receiving royalties in the future, based on a specified percentage of the gross margin received by Proliant as defined in the Proliant Agreement.
Inzymes ApS
On
September 18, 2023, Dyadic International (USA) Inc., a subsidiary of the Company, signed a Development and Exclusive License Agreement
(the “Inzymes Agreement”) with Inzymes ApS (“Inzymes”), a Denmark corporation, to develop and commercialize certain
non-animal dairy enzymes used in the production of food products using Dyadic’s proprietary Dapibus™ platform. In October
2023, the Company received an upfront payment of $
On October 11, 2024, the Inzymes Agreement was amended (“the Amended Inzymes Agreement”) to change the scope of research and development services required under the agreement as well as adjust the success fees upon the achievement of certain target yields, milestone payments upon first commercial sale of each product and royalties.
For
the year ended December 31, 2024, the Company has completed all product research and development services and satisfied all related performance
obligations under the Amended Inzymes Agreement, and recognized $
In
June 2025, the Company recognized milestone revenue of $
| 20 |
In
February 2026, final development activities for the first recombinant non-animal product were completed and the first commercial sale
was achieved. Upon achievement of this milestone, the Company received and recognized a $
Nutropy
On
July 17, 2026, Dyadic International (USA), Inc. entered into a Research License and Collaborative Development Agreement (the “Nutropy
Agreement”) with Nutropy SAS (“Nutropy”), a French company, under which Nutropy received an exclusive research license
and a non-exclusive commercial license to use the Company’s Dapibus™ platform and related intellectual property to develop
casein proteins. Nutropy pays a non-refundable annual research license fee, which is $
Note 4: Convertible Notes Payable
On
March 8, 2024, the Company issued an aggregate principal amount of $
The
Convertible Notes are senior, secured obligations of Dyadic and its affiliates, and interest is payable quarterly in cash on the principal
amount equal to
The Convertible Notes are secured by a first priority lien on substantially all assets of the Company and Dyadic International (USA), Inc.
The Convertible Notes are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options and ASC 815-15, Derivatives and Hedging. Under ASC 815, contracts that are both indexed to its own stock and classified in stockholders’ equity in its statement of financial position are not considered to be derivative instruments. Based on the Company’s analysis, it is determined that the Convertible Notes contain embedded features that are indexed to the Company’s own stock and are classified in stockholders’ equity in the Company’s statement of financial position, but do not meet the requirements for bifurcation and recognition as derivatives, and therefore, do not need to be accounted for separately. Accordingly, the proceeds received from the issuance of the Convertible Notes were recorded as a single liability in accordance with ASC 470 on the Company’s consolidated balance sheets.
The
Company incurred $
| 21 |
On
October 4, 2024, the Company entered an amendment (the “Amendment”) to the Convertible Notes. Under the Amendment, (i)
the conversion price at which the Convertible Notes are convertible into shares of the Company’s common stock was set at $
During
the year ended December 31, 2024, $
On May 1, 2025, the Company amended the Convertible Notes to extend the Redemption Date (as defined in the Convertible Notes) to December 1, 2026.
On
September 15, 2025, the Company amended the security agreement to reflect updates to the Secured Parties (as defined in the Security
Agreement) thereunder, including the addition of a trust for the benefit of the Company’s Chief Executive Officer, Mark Emalfarb,
as a result of his purchase and assignment to him of one of the Notes from an existing note holder in a principal amount of $
On
December 23, 2025, the Company entered into an additional amendment to the Convertible Notes, pursuant to which (i) the Maturity Date
(as defined in the Convertible Notes) was extended from March 8, 2027 to
The Company assessed each of the Amendments for a debt extinguishment or modification in accordance with ASC 470-50. As both the changes in the present value of future cash flows of the modified Convertible Notes to that of the original Convertible Notes (including callable features) and the change in fair value of the embedded conversion option to that of the carrying value of the Convertible Notes immediately before modification resulted in a less than 10% change, none of the Amendments were deemed substantial and they are regarded as note modifications. The Company did not incur any gain or loss relating to the modifications and any incremental costs, including legal fees, related to the Amendments were expensed.
For
the three and nine months ended September 30, 2026, interest of $
For
the three and nine months ended September 30, 2025, interest of $
As
of September 30, 2026, accrued interest on the Convertible Notes totaled $
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As of September 30, 2026, convertible notes payable consisted of the following:
| Holder | Issuance Date | Due Date | Interest Rate | Convertible Note Principal | Principal Repayments | Conversion to Common Stock | Principal Outstanding | |||||||||||||||||
| Mark A. Emalfarb Trust (1) | % | $ | $ | |||||||||||||||||||||
| Francisco Trust dated 2/28/1996 (2) | % | |||||||||||||||||||||||
| Bradley Emalfarb (3) | % | ( | ) | |||||||||||||||||||||
| Bradley Scott Emalfarb Irrevocable Trust (3) | % | ( | ) | |||||||||||||||||||||
| Emalfarb Descendant Trust (4) | % | |||||||||||||||||||||||
| Convertible Notes - Related Party | $ | $ | $ | ( | ) | |||||||||||||||||||
| Unamortized Debt Issuance Costs - Related Party | ( | ) | ||||||||||||||||||||||
| Net Carrying Amount | $ | |||||||||||||||||||||||
| Convertible Notes - Third Party (1) | % | $ | $ | $ | ||||||||||||||||||||
| Unamortized Debt Issuance Costs - Third Party | ( | ) | ||||||||||||||||||||||
| Net Carrying Amount | $ | |||||||||||||||||||||||
Notes:
| (1) | |
| (2) | |
| (3) | |
| (4) |
The Convertible Notes contain customary covenants, and the Securities Purchase Agreement relating to the Convertible Notes also contains certain affirmative and negative covenants (including, without limitation, restrictions on our ability to incur indebtedness, permit liens, make dividends or certain debt payments or consummate certain affiliate transactions). The Company was in compliance with its covenants with respect to the Convertible Notes as of September 30, 2026.
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Note 5: Commitments and Contingencies
Legal Proceedings
From time to time, the Company is subject to legal proceedings, asserted claims and investigations in the ordinary course of business, including commercial claims, employment and other matters, which management considers immaterial, individually and in the aggregate. The Company is not currently involved in any litigation that it believes could have a materially adverse effect on our financial condition or results of operations. The Company makes a provision for a liability when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. The requirement for these provisions is reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Litigation is inherently unpredictable and costly. Protracted litigation and/or an unfavorable resolution of one or more proceedings, claims or investigations against the Company could have a material adverse effect on the Company’s consolidated financial position, cash flows or results of operations.
Jupiter Office Lease
The
Company’s three-year operating lease for its office in Jupiter, Florida expired on August 31, 2026. Effective September 1, 2026,
the Company exercised the first of two one-year renewal options, extending the lease term through August 31, 2027, at a monthly base
rent of approximately $
Description of Equity Plans
The 2021 Equity Incentive Award Plan (the “2021 Plan”) was adopted by the Company’s Board of Directors on April 9, 2021 and approved by the Company’s Annual Meeting of Shareholders (the “Annual Meeting”) on June 11, 2021. The 2021 Plan serves as a successor to the Company’s 2011 Equity Incentive Plan (the “2011 Plan”). Since the adoption of the 2021 Plan, all equity awards were made from the 2021 Plan, and no additional awards will be granted under the 2011 Plan. The 2021 Plan provides for the issuance of a variety of share-based compensation awards, including stock options, restricted stock awards, restricted stock unit awards, performance awards, dividend equivalents awards, deferred stock awards, stock payment awards and stock appreciation rights. As of the effective date of the 2021 Plan, the number of shares authorized for issuance under the 2021 Plan was increased by shares, in addition to any shares remaining available for grant under the 2011 Plan.
As of September 30, 2026, the Company had stock options outstanding and unvested restricted stock units in addition to shares of common stock available for grant under the 2021 Plan. As of December 31, 2025, the Company had stock options outstanding and unvested restricted stock units, in addition to shares of common stock available for grant under the 2021 Plan.
Stock Options
Options are granted to purchase common stock at prices that are equal to the fair value of the common stock on the date the option is granted. Vesting is determined by the Board of Directors at the time of grant. The term of any stock option awards under the Company’s 2011 Plan and 2021 Plan is , except for certain options granted to the contractors, which are two to .
The grant-date fair value of each option grant is estimated using the Black-Scholes option pricing model and amortized on a straight-line basis over the requisite service period, which is generally the vesting period, for each separately vesting portion of the award as if the award was, in substance, multiple awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including the following.
Risk-free interest rate. The risk-free interest rate is based on U.S. Treasury rates with securities approximating the expected lives of options at the date of grant.
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Expected dividend yield. The expected dividend yield is zero, as the Company has never paid dividends to common stockholders and does not currently anticipate paying any in the foreseeable future.
Expected stock price volatility. The expected stock price volatility was calculated based on the Company’s own volatility. The Company reviews its volatility assumption on an annual basis.
Expected life of option. The expected life of option was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The Company uses the weighted average vesting period and contractual term of the option as the best estimate of the expected life of a new option.
| Risk-free interest rate | % - | % | ||
| Expected dividend yield | % | |||
| Expected stock price volatility | - | % | ||
| Expected life of options (in years) | - |
| Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate
Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2025 | $ | $ | ||||||||||||||
| Granted (1) | ||||||||||||||||
| Exercised | ||||||||||||||||
| Expired (2) | ( | ) | ||||||||||||||
| Cancelled | ||||||||||||||||
| Outstanding at September 30, 2026 | $ | $ | ||||||||||||||
| Exercisable at September 30, 2026 | $ | $ | ||||||||||||||
Notes:
| (1) |
| ● | Annual share-based compensation awards on January 2, 2026, with an exercise price of $, including: (a) stock options granted to executives and key personnel, vesting upon the one-year anniversary, or annually in equal installments over , (b) stock options granted to members of the Board of Directors, vesting upon the one-year anniversary, (c) stock options granted to employees, vesting annually in equal installments over four years, and (d) stock options granted to a consultant, vesting upon the one-year anniversary. |
| (2) |
| ● | (a) stock options with a weighted average exercise price of $ per share granted to members of the Board of Directors, (b) stock options with a weighted average exercise price of $ per share granted to key personnel, (c) stock options with an exercise price of $ per share granted to a former employee, and (d) stock options with an exercise price of $ per share granted to an employee. |
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Restricted Stock Units
Restricted stock units (the “RSUs”) are granted subject to certain restrictions. Vesting conditions are determined at the discretion of the Board of Directors. The fair market value of RSUs is generally determined based on the closing market price of the stock on the grant date.
Weighted- Average | ||||||||
| Grant Date | ||||||||
| Shares | Fair Value | |||||||
| Outstanding at December 31, 2025 | $ | |||||||
| Granted (1) | ||||||||
| Vested (2) | ( | ) | ||||||
| Unvested shares forfeited | ||||||||
| Outstanding at September 30, 2026 | $ | |||||||
Notes:
| (1) | |
| On March 1, 2026, the Company granted two consultants a total of restricted stock units, vesting upon the satisfaction of the applicable time and performance criteria. | |
| (2) |
Compensation Expenses
We recognize all share-based payments to employees and our Board of Directors, as non-cash compensation expense, in research and development expenses or general and administrative expenses in the consolidated statement of operations, and these charges had no impact on the Company’s reported cash flows. Stock-based compensation expense is calculated on the grant date fair values of such awards, and recognized each period based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are recorded as they occur. For the three months ended September 30, 2026, forfeitures were recorded.
For performance-based awards, the Company recognizes related stock-based compensation expenses based upon its determination of the potential likelihood of achievement of the specified performance conditions at each reporting date.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
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The following table summarizes the Company’s non-cash share-based compensation expense allocation between options and restricted stock units:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Share-based compensation expense - stock option | $ | $ | $ | $ | ||||||||||||
| Share-based compensation expense - restricted stock units | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Warrants
On
August 1, 2025, in connection with the services the Underwriter provided to the Company in the Offering, the Company issued to the Underwriter
warrants to purchase up to
The warrants were accounted for as equity-classified instruments under ASC 718. The fair value of the warrants, determined using the Black-Scholes option pricing model, was estimated to be $ at the issuance date and was recorded as a component of additional paid-in capital, with a corresponding reduction to offering proceeds as an offering cost. The assumptions used in the Black-Scholes model included:
| Risk-free interest rate: | % | |||
| Expected dividend yield: | % | |||
| Expected stock price volatility: | % | |||
| Expected life of warrants (in years) |
Note 7: Stockholders’ Equity
2025 Public Offering of Common Stock
On July 30, 2025, the Company entered into an underwriting agreement (the “UA”) with Craig-Hallum Capital Group, in its capacity as underwriter, relating to the issuance and sale of shares of the Company’s common stock at a price of $ per share. The closing of the Offering occurred on August 1, 2025.
Total
gross proceeds from the Offering were $
Joseph Hazelton, our President and Chief Operating Officer, purchased shares of the Company’s common stock in the Offering at the public offering price.
In
consideration for Craig-Hallum serving as the underwriter of the Offering, the Company paid the Underwriter a cash fee equal to 7% of
the aggregate gross proceeds raised in the Offering, reimbursed the Underwriter for certain expenses and legal fees in the amount of
$
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2026 Registered Direct Offering of Common Stock and Concurrent Private Placement of Common Warrants
On
August 13, 2026, the Company entered into a common stock purchase agreement with an institutional investor relating to the
issuance and sale of
shares of the Company’s common stock at a purchase price of $
per share in a registered direct offering (the “2026 Offering”) under the Company’s then-effective shelf
registration statement on Form S-3. The closing occurred on August 14, 2026. Aegis Capital Corp. acted as sole placement agent and
received a cash fee equal to 7.0% of the gross proceeds and reimbursement of certain legal fees. Gross proceeds from the shares were
$
Concurrently
with the 2026 Offering, the Company issued and sold to the same investor, in a private placement exempt from registration under Section
4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 thereunder, warrants to purchase an aggregate of
The exercise price of the Common Warrants is subject to customary adjustments for stock splits, stock dividends and similar events. The Common Warrants may be exercised for cash or, if no registration statement covering the shares issuable upon exercise is effective at the time of exercise, on a cashless (net exercise) basis. A holder may not exercise a Common Warrant to the extent the holder would beneficially own more than 4.99% (or, at the holder’s election made before issuance, 9.99%) of the Company’s outstanding common stock. The Common Warrants also contain a fundamental transaction provision. A fundamental transaction includes a merger or consolidation, a sale of all or substantially all of the Company’s assets, a tender or exchange offer accepted by holders of 50% or more of the outstanding common stock, a reclassification of the common stock, and an acquisition by a person or group of 50% or more of the voting power of the common stock. Upon a fundamental transaction, the holder may require the Company to purchase the warrant for cash equal to its Black-Scholes Value, calculated using a volatility of not less than 100%. If the fundamental transaction is not within the Company’s control, including if it is not approved by the Company’s Board of Directors, the holder is instead entitled to receive the same type or form of consideration, at the Black-Scholes Value, that is paid to holders of common stock; see Note 1, Warrant Liability, for the effect of this provision on the valuation.
Under
the registration rights agreement, the Company was required to file a registration statement for the resale of the shares issuable
upon exercise of the Common Warrants within 30 days after closing and to have it declared effective within 30 days after filing (60
days in the event of a full review). The Company filed the registration statement on September 11, 2026, and it was declared
effective on September 18, 2026. If the registration statement ceases to be effective, or the prospectus cannot be used, for more
than 10 consecutive or 15 aggregate calendar days in any twelve-month period, the Company would be required to pay the holders
liquidated damages equal to 2% of the aggregate exercise price of the Common Warrants ($
The Company evaluated the Common Warrants under ASC 480 and ASC 815-40 and determined that a volatility floor contained in the Common Warrants’ fundamental transaction settlement provision is not an input a market participant would use to price a fixed-for-fixed option on the Company’s common stock. Accordingly, the Common Warrants are not considered indexed to the Company’s own stock and are accounted for as a derivative liability, initially and subsequently measured at fair value, with changes in fair value recognized in other income (expense) in the consolidated statements of operations.
The
Company allocated the gross proceeds first to the Common Warrants at their issuance-date fair value of $
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The fair value of the Common Warrants reflects one warrant for each share sold, a five-year term and an exercise price close to the share price; see Note 1, Fair Value Measurements, for the valuation inputs. Because the fair value did not exceed the total proceeds, no loss was recognized at issuance.
Issuances of Common Stock Related to Stock Options and RSUs
For the nine months ended September 30, 2026, there were shares issued from the vesting of restricted stock units with a weighted average issue price of $ per share.
Treasury Stock
As
of September 30, 2026, there were shares of common stock held in treasury, at a cost of approximately $
Disgorgement of Short-Swing Profits
In
July 2026, the Company received $
Note 8: Segment
The
Company operates and manages its business as
The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The Company operates in the U.S. and Europe. For geographic information about the Company’s revenue, see Note 1, Concentrations and Credit Risk. As of September 30, 2026, the Company had no material long-lived assets.
The CODM uses consolidated net loss to evaluate the Company’s spending and monitor budget versus actual results. The monitoring of budgeted versus actual results is used in assessing the performance of the segment and in establishing resource allocation across the organization. Factors used in determining the reportable segment include the nature of the Company’s operating activities, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. The accounting policies of the segment are the same as those described in Note 1 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K filed on March 25, 2026, as amended on April 30, 2026.
The
measure of segment assets reviewed by the CODM is total consolidated assets. In addition, the CODM reviews cash, cash equivalents,
restricted cash and investment securities as a supplemental measure of liquidity, which is not a measure of segment assets. As of
September 30, 2026 and December 31, 2025, the Company’s cash, cash equivalents, restricted cash and its investment securities,
including accrued interest were $
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The following table presents information about segment revenue, significant segment expenses and segment operating loss for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
| Total cost of revenues | ||||||||||||||||
| Research and development expenses: | ||||||||||||||||
| Outside contracted services | ||||||||||||||||
| Personnel related costs | ||||||||||||||||
| Facilities, overhead, and other | ||||||||||||||||
| General and administrative expenses: | ||||||||||||||||
| Compensation and related expenses | ||||||||||||||||
| Business consulting expenses | ||||||||||||||||
| Legal and professional services | ||||||||||||||||
| Other G&A expenses | ||||||||||||||||
| Share-based compensation expenses | ||||||||||||||||
| Foreign currency exchange (gain) loss, net | ||||||||||||||||
| Other (income) expenses, net | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | $ | $ | $ | ||||||||||||
Note 9: Subsequent Events
For disclosure in the consolidated financial statements, the Company has evaluated subsequent events through November 13, 2026, the date the consolidated financial statements were issued. Management is not aware of any material events that have occurred after the balance sheet date that would require adjustment to, or disclosure in the accompanying financial statements, other than as described below.
In November 2026, Inzymes ApS
confirmed that the first commercial sale of the Company’s second chymosin product, camel chymosin produced with the Company’s
Dapibus™ production strain, occurred in October 2026, achieving the first-commercial-sale milestone under the Inzymes Agreement.
The related milestone payment of $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements appearing in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks, assumptions and uncertainties. Important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis include, but are not limited to, those set forth in “Part II, Item 1A. Risk Factors” in this Quarterly Report. All forward-looking statements included in this Quarterly Report are based on information available to us as of the time we file this Quarterly Report and, except as required by law, we undertake no obligation to update publicly or revise any forward-looking statements.
Overview
Description of Business
Dyadic International, Inc. (“Dyadic,” “we,” “us,” “our,” or the “Company”) d/b/a Dyadic Applied BioSolutions, is a global biotechnology platform company headquartered in Jupiter, Florida, with operations in the United States and the Netherlands. We develop and commercialize scalable, non-animal protein-production platforms intended to address growing demand across the life sciences, food and nutrition, and bio-industrial markets.
Effective August 1, 2025, the Company began doing business as Dyadic Applied BioSolutions. This rebranding reflects the Company’s strategic transition from a primarily research-driven organization to a commercially focused biotechnology enterprise. The new name and visual identity are intended to better communicate our focus on delivering applied biotechnology solutions through our proprietary Dapibus™ and C1 protein-production platforms.
Our Dapibus™ and C1 platforms are designed to enable the rapid, flexible, and potentially cost-effective production of high-value proteins. We are primarily focused on commercial opportunities involving non-therapeutic proteins for applications in the life sciences, food and nutrition, and industrial bioprocessing markets. Potential applications include proteins used in research and diagnostics, food and nutrition products, industrial enzymes, and other bio-based products. By focusing on selected non-therapeutic applications, we seek to address markets that may involve shorter development timelines and less regulatory complexity than therapeutic biologics, while pursuing opportunities for product sales, partnerships, licensing, and longer-term supply arrangements.
In parallel with our commercial focus, we continue to advance our biopharmaceutical capabilities through externally funded collaborations and other third-party sources of funding, including programs supported by organizations such as the Gates Foundation and the Coalition for Epidemic Preparedness Innovations (“CEPI”), as applicable. These programs support the continued development and validation of our protein-production technologies and may help expand the potential applications of the C1 platform over the longer term. Our objective is to enhance the value of the C1 platform for the development and manufacture of biologic antigens, antibodies, enzymes, and other proteins, including for potential use in biopharmaceutical, vaccine, diagnostic, and related applications.
Our business strategy is therefore focused on two complementary objectives: (1) pursuing near- and medium-term potential commercial opportunities in non-therapeutic protein markets, including life sciences, food and nutrition, and industrial bioprocessing; and (2) continuing to advance our biopharmaceutical technology base mainly through third-party-funded collaborations and other strategic programs. We believe this approach may allow us to pursue revenue-generating opportunities while preserving the longer-term potential of our platforms in broader biopharmaceutical and biologics markets.
Recent Company Developments
Commercial Products & Market Adoption
● First Direct Commercial Product Sales: During the third quarter, Dyadic recorded its first direct commercial product sales, primarily of recombinant transferrin and DNase I. Although initial sales were not material in amount, they are a milestone as they establish a direct-product revenue channel, alongside existing and potential partner-generated license, milestone and profit-sharing or royalty economics.
● Expanded OEM Distribution: Integrated Biotherapeutics (IBT Bioservices) launched an initial portfolio of six Dyadic-produced research-use-only recombinant protein products through its distribution network. The companies are evaluating additional offerings, extending Dyadic’s potential reach across research, diagnostics, reagent and cell culture applications.
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● Growing Customer Engagement: Sampling requests and customer evaluations increased for human and bovine transferrin and other recombinant proteins. Dyadic is supporting customer testing and qualification with the objective of converting these engagements into repeat purchases and sustained product demand.
● Proliant AlbuFree™ Product Commercialization and Expansion: Proliant Health & Biologicals continued commercial promotion of AlbuFree™ DX, an animal-free recombinant human serum albumin produced using Dyadic’s C1 platform, including performance data relevant to diagnostic assay blocking and protein stabilization. Proliant also presented analytical research reporting high purity, low endotoxin levels and molecular characteristics resembling native human serum albumin. In addition, Proliant outlined planned additions to the AlbuFree™ family: AlbuFree™ TX for cell culture media and AlbuFree™ CGT for cell and gene therapy applications. These planned extensions offer opportunities to broaden C1-enabled product adoption and potential recurring commercial revenue.
● Second Commercial Chymosin Demonstrates Dapibus™ Versatility: In November 2026, Inzymes reported that the first commercial sale of the Company’s second chymosin product, camel chymosin produced with the Company’s Dapibus™ production strain, occurred in October 2026, achieving the first-commercial-sale milestone under the Inzymes Agreement. The Company expects to receive the $225,000 milestone payment and recognize it as revenue in the fourth quarter of 2026.
Strategic Partnerships, Licensing & Product Development
● Advancing Alpha-Lactalbumin Toward Commercialization: Advanced collaboration activities with BRIG BIO and Strive Nutrition to develop, scale and potentially commercialize Dapibus-produced bovine alpha-lactalbumin for next-generation nutrition products. The participants bring complementary protein development, manufacturing, regulatory and commercialization capabilities intended to support economically competitive commercial-scale production.
● Expanding Strategic Licensing Opportunities: Continued discussions with additional global companies regarding potential licensing, development and commercial arrangements involving alpha-lactalbumin and other animal-free proteins, as well as product collaborations and broader strategic opportunities involving C1, Dapibus and the Company’s recombinant protein portfolio. These discussions are intended to leverage partners’ resources, manufacturing capabilities and market access to advance higher-value products, including alpha-lactalbumin and transferrin, while creating opportunities for upfront fees, milestones and ongoing commercial participation.
● Broader Nutrition Protein Portfolio: Initiated development of recombinant bovine lactoferrin, complementing the Company’s human lactoferrin and alpha-lactalbumin programs and extending its portfolio of animal-free nutritional and functional proteins.
C1 Biopharmaceutical Platform – Advancing Global Vaccine and Antibody Programs
● Rapid Biologics Development: Demonstrated C1’s rapid development capabilities by producing and purifying two Scripps Research-designed Bundibugyo ebolavirus antigens in approximately 15 days from plasmid to C-tag-purified protein. Dyadic also demonstrated the development of a clonal C1 production strain and production of a Protein A-purified monoclonal antibody in approximately seven weeks. In our view, these achievements highlight C1’s potential to accelerate vaccine and antibody development, shorten manufacturing timelines, reduce production costs and enable faster advancement of biologics toward preclinical and clinical evaluation.
● Gates Foundation Programs Advance to Animal Studies: Under its approximately $3.1 million Gates Foundation-funded program, Dyadic achieved production yields of approximately 12.1 g/L for RSV monoclonal antibody RSM01 and 13.2 g/L for malaria monoclonal antibody MAM01 in seven-day fermentation runs. Independent laboratory evaluations included binding studies of both C1-produced antibodies conducted by Duke University and neutralization testing of RSM01 conducted by IQVIA. Following quarter-end, the Gates Medical Research Institute initiated preclinical animal studies in October 2026 to evaluate the pharmacokinetics of the C1-produced RSV and malaria antibodies through direct, head-to-head comparisons with their respective GMP CHO-produced counterparts. Results are anticipated in the first quarter of 2027. These studies aim to generate additional comparative preclinical data to support the antibodies’ continued advancement toward potential clinical development. We believe the demonstrated production yields, together with C1’s ability to produce antibodies with targeted human-like glycosylation profiles, further highlight the platform’s potential to manufacture complex biologics efficiently while reducing production costs and increasing manufacturing flexibility.
● Accelerating C1 Biopharmaceutical Validation and Adoption: Continued to advance multiple vaccine and monoclonal antibody programs through preclinical development, including ongoing animal studies evaluating ebolavirus and other vaccine candidates conducted in collaboration with Fondazione Biotecnopolo di Siena (FBS) and the European Vaccines Hub (EVH). Dyadic also continued advancing programs with Scripps Research, CEPI, NIAID/NIH, the University of Oxford, Wits University, the Israel Institute for Biological Research and other collaborators, including participation in the €170 million European Vaccines Hub initiative (representing total initiative funding, not funding awarded to Dyadic). These ongoing studies and collaborations are expected to generate additional preclinical and technical data to further validate C1’s capabilities and support broader adoption of the platform for biopharmaceutical applications addressing infectious and other diseases. Collectively, we believe these advances reinforce C1’s potential to accelerate the development and manufacturing of vaccines and therapeutics for pandemic preparedness and traditional medicine, reduce production costs and expand global access to biologic medicines.
Critical Accounting Estimates
The preparation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates that affect the reported amount of assets and liabilities and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenue and expenses during the applicable period. Actual results may differ from these estimates under different assumptions or conditions. Such differences could be material to the consolidated financial statements.
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We define critical accounting estimates as those that are reflective of significant judgments and uncertainties and which may potentially result in materially different results under different assumptions and conditions. In applying these critical accounting estimates, our management uses its judgment to determine the appropriate assumptions to be used in making certain estimates. These estimates are subject to an inherent degree of uncertainty. Our critical accounting estimates include the following:
Revenue Recognition
The Company has launched an initial portfolio of research-use-only products for direct sales. Early-stage manufacturing is ongoing and initial shipments of product samples for evaluation and qualification purposes to distribution partners are underway. The Company also participates in the commercialization of products developed and launched by third-party collaborators, from which it is entitled to a share of revenue or profits.
For the three and nine months ended September 30, 2026, revenue from product sales was generated from initial sales of research-use-only products and the amount was not material. Therefore, the product revenue was included in the research and development revenue in the consolidated statements of operations. Revenue from product sales is recognized at a point in time when control of the products transfers to the customer, generally upon shipment. Product samples shipped to distribution partners and prospective customers for evaluation and qualification purposes do not generate revenue. Other than these initial product sales, our revenue to date has been research revenue from third-party collaborations and grants, as well as revenue from sublicensing agreements and collaborative arrangements, which may include upfront payments, options to obtain a license, payment for research and development services, milestone payments and royalties, in the form of cash or non-cash considerations (e.g., minority equity interest).
Revenue related to research collaborations and agreements: The Company typically performs research and development services as specified in each respective agreement on a best-efforts basis, and recognizes revenue from research funding under collaboration agreements in accordance with the 5-step process outlined in ASC Topic 606 (“Topic 606”): (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We recognize revenue when we satisfy a performance obligation by transferring control of the service to a customer in an amount that reflects the consideration that we expect to receive. Depending on how the performance obligation under our license and collaboration agreements is satisfied, we recognize the revenue either at a point in time or over time by using the input method under Topic 606 to measure the progress toward complete satisfaction of a performance obligation.
Under the input method, revenue will be recognized based on the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company believes that the cost-based input method is the best measure of progress to reflect how the Company transfers its performance obligation to a customer. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the performance obligation. These costs consist primarily of full-time equivalent effort and third-party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations.
A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified, and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.
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Revenue related to grants: The Company receives grants from governments, agencies, and other private and not-for-profit organizations. These grants are intended to be used to fund the Company’s research collaborations partially or fully, including opportunities and projects that the Company is pursuing with certain collaborators. However, most, if not all, of such potential grant revenue, is expected to be earmarked for third parties to advance the research required, including preclinical and clinical trials for vaccines and/or antibodies candidates. Revenue related to grants are presented on a gross basis on the Consolidated Statements of Operations.
Revenue related to sublicensing agreements: If the sublicense to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when technology is transferred to the customer and the customer can use and benefit from the license.
Customer options: If the sublicensing agreement includes customer options to purchase additional goods or services, the Company will evaluate if such options are considered material rights to be deemed as separate performance obligations at the inception of each arrangement.
Milestone payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Company evaluates whether the achievement of the milestones is considered probable and estimates the amount to be included in the transaction price. If the milestone payment is in exchange for a sublicense and is based on the sublicensee’s subsequent sale of product, the Company recognizes milestone payment by applying the accounting guidance for royalties.
Royalties: With respect to licenses deemed to be the predominant item to which the sales-based royalties relate, including milestone payments based on the level of sales, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its sublicensing arrangements.
We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenue is recognized. When there is a timing difference between when we invoice customers and when revenue is recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred research and development obligations), as appropriate. If upfront fees or considerations related to a sublicensing agreement are received prior to the technology transfer, the Company will record the amount received as deferred revenue from the licensing agreement.
We are not required to disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.
The Company adopted a practical expedient to expense sales commissions when incurred because the amortization period would be one year or less.
Accrued Research and Development Expenses
We estimate accrued research and development expenses at each balance sheet date for services rendered but not yet invoiced. Estimates are based on open contracts, purchase orders, and communication with personnel, and are confirmed with service providers periodically. Most providers invoice monthly or quarterly in arrears.
Stock-Based Compensation
We have granted stock options to employees, directors, and consultants. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model considers volatility in the price of our stock, the risk-free interest rate, the estimated life of the option, the closing market price of our stock and the exercise price. For purposes of the calculation, we assumed that no dividends would be paid during the life of the options. We also used the weighted-average vesting period and contractual term of the option as the best estimate of the expected life of a new option, except for the options granted to certain contractors which are two to five years.
The expected stock price volatility was calculated based on the Company’s own volatility. The Company reviews its volatility assumption on an annual basis and has used the Company’s historical volatilities since 2016.
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The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management judgment. These estimates are neither predictive nor indicative of the future performance of our stock. As a result, if other assumptions had been used, our recorded share-based compensation expense could have been materially different from that reported. In addition, because some of the performance-based options issued to employees, consultants, and other third-parties vest upon the achievement of certain milestones, the total ultimate expense of share-based compensation is uncertain.
Warrant Liability
The Common Warrants issued on August 14, 2026 (see Note 7) are classified as a liability and measured at fair value at each reporting date using the Black-Scholes-Merton option pricing model. The warrant liability is classified within Level 3 of the fair value hierarchy because expected volatility, the significant unobservable input, requires significant judgment, including the selection of the historical look-back period, and is derived from the historical volatility of our daily closing share price over the five years ending on the valuation date. An increase (decrease) in expected volatility, or in our share price, would increase (decrease) the fair value of the warrant liability. A ten percentage point increase (decrease) in expected volatility at September 30, 2026, holding all other inputs constant, would increase (decrease) the fair value of the warrant liability by approximately $116,000 ($126,000). As of September 30, 2026, the warrant liability was $813,424, compared with $1,747,653 at issuance. The resulting $934,229 gain, less $388,702 of issuance costs allocated to the Common Warrants, is presented as a net gain of $545,527 in the consolidated statements of operations. The fair value does not reflect the 100% volatility floor in the fundamental transaction provision because no such transaction has occurred or is considered probable; had such a transaction occurred on September 30, 2026, the amount payable would have been approximately $1.1 million. Liability classification is a significant judgment that the volatility floor in the fundamental transaction provision is not an input a market participant would use to price a fixed-for-fixed option on our common stock (ASC 815-40).
Accounting for Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, “Income Taxes”. Under this method, income tax expense / (benefit) is recognized for: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all the deferred tax assets will not be realized.
In determining taxable income for the Company’s consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process requires the Company to make certain estimates of our actual current tax exposure and assessment of temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating the Company’s ability to recover its deferred tax assets, the Company must consider all available positive and negative evidence including its past operating results, the existence of cumulative losses in the most recent years and its forecast of future taxable income. Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.
The Company is required to evaluate the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability should be recognized (or amount of net operating loss carryforward or amount of tax refundable is reduced) for unrecognized tax benefits, because it represents a company’s potential future obligation to the taxing authority for a tax position that was not recognized because of applying the provision of ASC 740.
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The Company classifies accrued interest and penalties related to its tax positions as a component of income tax expense. The Company currently is not subject to U.S. federal, state, and local tax examinations by tax authorities for the years before 2022.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Recent Accounting Pronouncements
See Note 1 to the Consolidated Financial Statements for information about recent accounting pronouncements.
Results of Operations
Three and nine months ended September 30, 2026, compared to the same period in 2025
Revenue and Cost of Revenue
The following table summarizes the Company’s revenue and cost of revenue for the three and nine months ended September 30, 2026 and 2025:
| Three months ended | ||||||||||||||||
| September 30, 2026 | September 30, 2025 | Favorable (Unfavorable) Change in $ | Favorable (Unfavorable) Change in % | |||||||||||||
| Total revenue | $ | 449,101 | $ | 1,164,617 | $ | (715,516 | ) | (61.4 | )% | |||||||
| Total cost of revenue | 375,115 | 1,024,003 | 648,888 | 63.4 | % | |||||||||||
| Research and development expenses | 429,945 | 571,872 | 141,927 | 24.8 | % | |||||||||||
| General and administrative expenses | 1,450,750 | 1,481,356 | 30,606 | 2.1 | % | |||||||||||
| Foreign currency exchange (gain) loss, net | 5,656 | 12,755 | 7,099 | 55.7 | % | |||||||||||
| Loss from operations | (1,812,365 | ) | (1,925,369 | ) | 113,004 | 5.9 | % | |||||||||
| Other income (expense), net | 455,324 | (50,643 | ) | 505,967 | 999.1 | % | ||||||||||
| Net loss | $ | (1,357,041 | ) | $ | (1,976,012 | ) | $ | 618,971 | 31.3 | % | ||||||
| Nine months ended | ||||||||||||||||
| September 30, 2026 | September 30, 2025 | Favorable (Unfavorable) Change in $ | Favorable (Unfavorable) Change in % | |||||||||||||
| Total revenue | $ | 2,521,195 | $ | 2,524,819 | $ | (3,624 | ) | (0.1 | )% | |||||||
| Total cost of revenue | 2,151,120 | 1,935,252 | (215,868 | ) | (11.2 | )% | ||||||||||
| Research and development expenses | 1,238,635 | 1,696,230 | 457,595 | 27.0 | % | |||||||||||
| General and administrative expenses | 4,895,944 | 4,514,324 | (381,620 | ) | (8.5 | )% | ||||||||||
| Foreign currency exchange (gain) loss, net | 4,758 | 35,925 | 31,167 | 86.8 | % | |||||||||||
| Loss from operations | (5,769,262 | ) | (5,656,912 | ) | (112,350 | ) | (2.0 | )% | ||||||||
| Other income (expense), net | 333,654 | (140,453 | ) | 474,107 | 337.6 | % | ||||||||||
| Net loss | $ | (5,435,608 | ) | $ | (5,797,365 | ) | $ | 361,757 | 6.2 | % | ||||||
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Total revenue for the three months ended September 30, 2026 was $449,101, representing a decrease of $715,516 or 61.4% compared to $1,164,617 for the three months ended September 30, 2025. The decrease was driven by a $538,199 decrease in grant revenue from lower activities under the Gates Foundation and CEPI grants and a $187,728 decrease in research and development revenue resulting from the completion of several collaboration projects in the prior-year period, partially offset by $10,411 of license fee revenue.
Total revenue for the nine months ended September 30, 2026 was $2,521,195, representing a decrease of $3,624 or 0.1% compared to $2,524,819 for the nine months ended September 30, 2025. The slight decrease was driven by a $56,801 decrease in research and development revenue resulting from the reduction in the number and size of collaboration activities and a $19,589 decrease in license and milestone revenue, partially offset by a $72,766 increase in grant revenue, as higher activities under the CEPI grant were largely offset by lower activities under the Gates Foundation grant. License and milestone revenue for the nine months ended September 30, 2026 included a $200,000 milestone under the Inzymes Agreement, compared to a $250,000 milestone under the Inzymes Agreement in the prior-year period.
Total cost of revenue for the three months ended September 30, 2026 was $375,115, representing a decrease of $648,888 or 63.4% compared to $1,024,003 for the three months ended September 30, 2025. The decrease was due to a $503,610 decrease in cost of grant revenue from lower activities under the Gates Foundation and CEPI grants and a $145,278 decrease in the cost of research and development revenue.
Total cost of revenue for the nine months ended September 30, 2026 was $2,151,120, representing an increase of $215,868 or 11.2% compared to $1,935,252 for the nine months ended September 30, 2025. The increase was driven by a $172,604 increase in cost of grant revenue, primarily from higher activities under the CEPI grant, and a $43,264 increase in the cost of research and development revenue.
Research and Development Expenses
Research and development costs are expensed as incurred and include salary and benefits of research personnel, third-party contract research organization services and supply costs.
Research and development expenses for the three months ended September 30, 2026, were $429,945, a decrease of $141,927 or 24.8% compared to $571,872 for the same period in 2025. The decrease was primarily due to a $199,105 decrease in third-party contract research services resulting from a reduction in the number of active internal research initiatives, partially offset by a $45,594 increase in personnel costs and an $11,584 increase in facilities and other costs.
Research and development expenses for the nine months ended September 30, 2026, were $1,238,635, a decrease of $457,595 or 27.0% compared to $1,696,230 for the same period in 2025. The decrease was primarily due to a $470,276 decrease in third-party contract research services resulting from a reduction in the number of active internal research initiatives and a $3,939 decrease in facilities and other costs, partially offset by a $16,620 increase in personnel costs.
General and Administrative Expenses
General and administrative expenses for the three months ended September 30, 2026, were $1,450,750, a decrease of $30,606 or 2.1%, compared to $1,481,356 for the same period in 2025. The decrease was primarily due to lower legal and professional services expenses of $166,541, partially offset by higher outside business development services and other expenses of $146,500.
General and administrative expenses for the nine months ended September 30, 2026, were $4,895,944, an increase of $381,620 or 8.5%, compared to $4,514,324 for the same period in 2025. The increase was primarily due to higher outside business development services and other expenses of $448,860, and higher legal and professional services expenses of $140,238, partially offset by lower share-based compensation expense of $291,438.
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Loss from Operations
Loss from operations for the three months ended September 30, 2026 was $1,812,365, a decrease of $113,004 or 5.9%, compared to $1,925,369 for the same period in 2025. The decrease was largely attributable to lower total cost of revenue of $648,888, lower research and development expenses of $141,927, lower general and administrative expenses of $30,606 and a lower foreign currency exchange loss of $7,099, partially offset by lower total revenue of $715,516.
Loss from operations for the nine months ended September 30, 2026 was $5,769,262, an increase of $112,350 or 2.0%, compared to $5,656,912 for the same period in 2025. The increase was largely attributable to higher general and administrative expenses of $381,620, higher total cost of revenue of $215,868 and lower total revenue of $3,624, partially offset by lower research and development expenses of $457,595 and a lower foreign currency exchange loss of $31,167.
Other Income (Expenses), Net
For the three months ended September 30, 2026, total other income, net, was $455,324, compared to total other expenses, net, of $50,643 for the same period in 2025. The change was primarily due to a $934,229 non-cash gain from the change in fair value of the warrant liability and lower interest expenses of $4,580, partially offset by $388,702 of issuance costs allocated to the warrant liability (presented together in the consolidated statements of operations as a net gain of $545,527) and lower interest income of $44,140.
For the nine months ended September 30, 2026, total other income, net, was $333,654, compared to total other expenses, net, of $140,453 for the same period in 2025. The change was primarily due to a $934,229 non-cash gain from the change in fair value of the warrant liability, lower interest expenses of $13,409, partially offset by $388,702 of issuance costs allocated to the warrant liability (presented together in the consolidated statements of operations as a net gain of $545,527) and lower interest income of $84,829.
Net Loss
Net loss for the three months ended September 30, 2026 was $1,357,041, compared to $1,976,012 for the same period in 2025. The decrease of $618,971 was due to the change in other income (expenses), net, of $505,967 and a decrease of $113,004 in loss from operations.
Net loss for the nine months ended September 30, 2026 was $5,435,608, compared to $5,797,365 for the same period in 2025. The decrease of $361,757 was due to the change in other income (expenses), net, of $474,107, partially offset by an increase of $112,350 in loss from operations.
Liquidity and Capital Resources
As required under ASC 205-40, management evaluated conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. As discussed in Note 1 to the Consolidated Financial Statements, as of September 30, 2026, our management has concluded that there is substantial doubt about our ability to continue as a going concern, which depends upon our obtaining necessary financing to meet our obligations and repay our liabilities arising from normal business operations as they come due. For more information regarding our management’s mitigation plan and the associated risks, see Note 1 to the Consolidated Financial Statements and “Part II, Item 1A. Risk Factors” of this Quarterly Report. If we are unable to implement sufficient mitigation efforts, we may be forced to limit our business activities or be unable to continue as a going concern, which would have a material adverse effect on our results of operations and financial condition.
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The Company expects to incur losses and have negative net cash flows from operating activities as it continues developing its Dapibus™ and C1 microbial protein production platforms and related products, commercialization activities, and as it expands its pipelines and engages in further research and development activities for internal products as well as for its third-party collaborators and licensees. The success of the Company depends on its ability to develop its technologies and products to the point of regulatory approval, commercialization, and subsequent revenue generation or through the sublicensing of the Company’s technologies and products, and its ability to raise capital to finance these developmental efforts.
On March 8, 2024, the Company issued an aggregate principal amount of $6.0 million of its 8.0% Senior Secured Convertible Promissory Notes (the “Convertible Notes”) in a private placement. The purchasers of the Convertible Notes included immediate family members and family trusts related to Mark Emalfarb, our President and Chief Executive Officer and a member of our Board of Directors, including The Francisco Trust, an existing holder of more than 5% of the Company’s outstanding common stock (collectively, the “Purchasers”). The net proceeds from the sale of Convertible Notes, after deducting offering expenses, were $5,824,326. The Company intends to use the net proceeds from the offering of the Convertible Notes for working capital and general corporate purposes.
The Convertible Notes are senior, secured obligations of Dyadic and its affiliates, and interest is payable quarterly in cash on the principal amount equal to 8% per annum. The Convertible Notes, as amended, will mature on December 31, 2027 (the “Maturity Date”), unless earlier converted, repurchased, or redeemed in accordance with the terms of the Convertible Notes. The Convertible Notes can be converted into shares of common stock, at the option of the holders of the Convertible Notes (the “Noteholders”) at any time prior to the Maturity Date.
During the year ended December 31, 2024, $910,000 of Convertible Notes were converted into 556,623 shares of common stock. For more information regarding the Convertible Notes, including the covenants related thereto, see Note 4 to the Consolidated Financial Statements.
On May 1, 2025, the Company amended the Convertible Notes to extend the Redemption Date (as defined in the Convertible Notes) to December 1, 2026. The holders’ redemption right was subsequently eliminated by the December 23, 2025 amendment described below, except in the case of an Event of Default.
On September 15, 2025, the Company amended the security agreement to reflect updates to the Secured Parties (as defined in the Security Agreement) thereunder, including the addition of a trust for the benefit of the Company’s Chief Executive Officer, Mark Emalfarb, as a result of his purchase and assignment to him of one of the Notes from an existing note holder in a principal amount of $1,000,000.
On December 23, 2025, the Company entered into an additional amendment to the Convertible Notes, pursuant to which (i) the Maturity Date (as defined in the Convertible Notes) was extended from March 8, 2027 to December 31, 2027, (ii) the conversion price at which the Convertible Notes are convertible into shares of the Company’s common stock was set at $1.05 per share of common stock, and (iii) except in the case of an Event of Default (as defined in the Convertible Notes), the holders no longer have the right to elect to have the Company redeem all, or any part, of the principal amount then remaining under the Convertible Notes.
The Convertible Notes contain customary covenants, and the Securities Purchase Agreement relating to the Convertible Notes also contains certain affirmative and negative covenants (including, without limitation, restrictions on our ability to incur indebtedness, permit liens, make dividends or certain debt payments or consummate certain affiliate transactions). The Company was in compliance with its covenants with respect to the Convertible Notes as of September 30, 2026.
On November 16, 2024, Dyadic entered into an agreement with the Gates Foundation relating to the Gates Foundation Grant in the amount of $3,092,136 for the cell line development of monoclonal antibodies targeting respiratory syncytial virus and malaria utilizing the Company’s C1 platform to provide globally accessible treatment options for underserved populations. Funds received in advance that have not yet been spent are recorded as restricted cash in the Company’s consolidated balance sheets. As of September 30, 2026, the Company had received the full amount of the Gates Foundation Grant.
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On March 20, 2025, the Company received a funding award (the “CEPI Grant”) from the Coalition for Epidemic Preparedness Innovations (“CEPI”) to advance Dyadic’s C1 platform through a $4.5 million grant through Fondazione Biotecnopolo di Siena (“FBS”) to accelerate recombinant protein vaccine development and manufacturing. The funding will support antigen design, cell line development, optimization, characterization, and scale-up to cGMP manufacturing. If successful, the next phase will focus on selecting a CEPI-priority pathogen antigen. Dyadic, as a subcontractor, will receive up to $2.4 million of the total grant funding.
On August 1, 2025, the Company completed its underwritten Offering of 6,052,000 shares of the Company’s common stock pursuant to an underwriting agreement, dated July 30, 2025, between the Company and Craig-Hallum. The public offering price in the Offering was $0.95 per share of common stock. 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. The Company has been using the net proceeds of the Offering for working capital and general corporate purposes, such as product development, sales and marketing.
On March 6, 2026, the Company entered into an At-The-Market Issuance Sales Agreement with Craig-Hallum Capital Group LLC, allowing the Company to sell up to $4,238,000 of common stock from time to time through Craig-Hallum as sales agent, at a commission of up to 3.0% of gross proceeds. As of the date of this report, no shares have been sold under the agreement. The shelf registration statement under which shares could be sold expired on August 25, 2026, and we cannot currently sell shares under the agreement due to certain contractual restrictions. See Note 1 and “We may need substantial additional capital in the future to fund our business, and certain equity issuances may cause significant dilution to our stockholders or present conflicts of interest” in “Part II, Item 1A. Risk Factors” for additional details.
On August 14, 2026, the Company completed the 2026 Offering, which included a registered direct offering of 3,625,000 shares of common stock at $0.795 per share and a concurrent private placement of Common Warrants to purchase 3,625,000 shares of common stock at an exercise price of $0.84 per share, for total gross proceeds of $2.9 million and net proceeds of approximately $2.3 million after placement agent fees and other offering expenses. Net cash received at closing was $2.6 million, after $0.3 million of placement agent fees and expenses withheld; the remaining $0.36 million of offering costs was unpaid as of September 30, 2026. See Note 7 to the Consolidated Financial Statements.
As of September 30, 2026, total cash amounted to $6.04 million, which included cash, cash equivalents and short-term investments of $4.57 million and restricted cash of $1.46 million, compared to $8.55 million, which included $7.32 million and $1.23 million, respectively, as of December 31, 2025. The carrying value of investment grade securities, including accrued interest as of September 30, 2026, was $0.65 million compared to $2.73 million as of December 31, 2025.
Restricted cash consists of Gates Foundation Grant funds received in advance, which may be used only for the funded project, may need to be refunded if not used, and are not available for general corporate purposes.
Net cash used in operating activities averaged approximately $0.59 million per month for the nine months ended September 30, 2026. This amount includes costs of the Gates Foundation-funded program, which are paid from restricted cash. We expect our cash usage to continue at a similar level, and it may vary from quarter to quarter depending on the timing of research and development activities, grant funding and commercial activities. Based on this rate of cash use, our unrestricted cash, cash equivalents and investment securities of $4.57 million, which are also needed to pay $0.36 million of unpaid offering costs, are expected to fund our operations for approximately seven months, which is less than twelve months from the date of this Quarterly Report. Our material cash requirements include interest on the Convertible Notes of approximately $407,200 per year, payable quarterly in cash, the $5.09 million principal amount of the Convertible Notes due December 31, 2027, and amounts due under our contract research and development agreements.
Our ability to raise additional capital is currently limited due to various factors, including contractual restrictions and regulatory limitations. For more information, see Note 1 and “We may need substantial additional capital in the future to fund our business, and certain equity issuances may cause significant dilution to our stockholders or present conflicts of interest” in “Part II, Item 1A. Risk Factors.” In addition, on September 25, 2026, we received written notices from Nasdaq that the bid price of our common stock had closed below $1.00 for 30 consecutive business days (Listing Rule 5550(a)(2)) and that the market value of our listed securities had been below $35 million for 30 consecutive business days (Listing Rule 5550(b)(2)), and we do not currently meet the stockholders’ equity requirement of Listing Rule 5550(b)(1). We have until March 24, 2027 to regain compliance with the first two requirements. A delisting of our common stock would adversely affect our ability to raise capital. For more information, see “If we fail to comply with listing standards of Nasdaq, our common stock may be delisted, adversely affecting the liquidity and market price of our common stock, as well as our ability to obtain sufficient additional capital to continue funding our operations” in “Part II, Item 1A. Risk Factors.”
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Net cash used in operating activities for the nine months ended September 30, 2026 was $5.3 million, which was principally attributable to a net loss of $5.4 million (including a non-cash gain of $0.9 million from the change in fair value of the warrant liability, net of $0.4 million of issuance costs allocated to the warrant liability), adjusted for share-based compensation expense of $0.4 million, an increase in accounts payable of $0.6 million and an increase in accrued expenses of $0.3 million, partially offset by an increase in accounts receivable of $0.4 million.
Net cash used in operating activities for the nine months ended September 30, 2025 was $3.9 million, which was principally attributable to a net loss of $5.8 million, partially offset by changes in operating assets and liabilities of $1.1 million and share-based compensation expenses of $0.7 million.
Net cash provided by investing activities for the nine months ended September 30, 2026 was $2.1 million, compared to net cash used in investing activities of $0.4 million for the nine months ended September 30, 2025. The $2.4 million change was attributable to a $3.8 million reduction in purchases of held-to-maturity investment securities, partially offset by a $1.3 million decrease in proceeds from maturities of investment securities.
Net cash provided by financing activities for the nine months ended September 30, 2026 was $2.7 million, consisting of $2.6 million of net proceeds received at the August 14, 2026 closing of the 2026 Offering, and $0.1 million from the disgorgement to the Company of short-swing profits under Section 16(b) of the Exchange Act, net of costs. Offering costs of $0.36 million that were unpaid as of September 30, 2026 will be presented as financing outflows when paid. Net cash provided by financing activities for the nine months ended September 30, 2025 was $5.0 million, primarily consisting of the net proceeds from the August 2025 underwritten public offering.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitation on Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II
Item 1. Legal Proceedings
We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. See Note 5 to the Consolidated Financial Statements for commitments and contingencies.
Item 1A. Risk Factors
Except as set forth below, there have been no changes to our risk factors from those disclosed in our Annual Report.
Our Common Warrants are classified as a liability, so changes in their fair value may materially affect our reported results.
On August 14, 2026, we sold 3,625,000 shares of common stock in a registered direct offering and, concurrently, Common Warrants to purchase 3,625,000 shares of common stock at an exercise price of $0.84 per share. The shares and the shares issuable upon exercise of the Common Warrants, which we registered for resale on a Form S-1 declared effective on September 18, 2026, increase the number of shares outstanding and could depress the market price of our common stock. Exercise of the Common Warrants would result in further dilution. We classify the Common Warrants issued in our 2026 Offering as a liability measured at fair value on a recurring basis using significant unobservable inputs, principally expected volatility, and we remeasure them at each reporting date. As a result, changes in our share price and in the assumptions used in the valuation will affect our results of operations, and the gain of $934,229 recognized for the three months ended September 30, 2026 following the decline in our share price could reverse if our share price increases. The Common Warrants also permit the holder, upon a change in control or similar fundamental transaction, to require us to purchase the warrant for cash equal to its Black-Scholes Value calculated using a volatility of not less than 100%, which could require a cash payment that exceeds the carrying value of the liability. See Notes 1 and 7 to the Consolidated Financial Statements.
We may need substantial additional capital in the future to fund our business, and certain equity issuances may cause significant dilution to our stockholders or present conflicts of interest.
Our future capital requirements may be substantial, particularly as we continue to further develop, engineer and optimize our microbial protein production platforms and other proprietary technologies, products and processes for licensing for research and development, and commercialization of potential animal and human pharmaceutical and other products. We currently have very little leverage, and if our capital resources are insufficient to meet our capital requirements, we will have to raise additional funds to continue the development of our technologies and complete the development and commercialization of products, if any, resulting from our technologies. For example, in August 2025, we completed the 2025 Offering for net proceeds of $4.9 million, and in August 2026, a registered direct offering and concurrent the 2026 Offering for net proceeds of $2.3 million. However, there can be no assurances that additional funds will be available, and there are currently several restrictions on our ability to raise more capital. Under the securities purchase agreement for the 2026 Offering, we may not, without the investors’ consent or in the case of limited exceptions, file a registration statement relating to an offering of equity or otherwise offer or issue any equity of the Company or any securities convertible into or exercisable or exchangeable for equity of the Company, in each case, until December 17, 2026. Our shelf registration statement on Form S-3 expired on August 25, 2026, and so during the pendency of this contractual restriction, we cannot sell shares under our At-The-Market Equity Offering Program. After that date, if our public float remains below $75 million, we will face continued restrictions on capital-raising under the SEC’s “baby shelf rules,” which limit us to selling only one-third of our public float under a new shelf registration statement on Form S-3 in any 12-month period, or alternatively, selling our securities on the more administratively burdensome Form S-1. We may therefore be unable to raise capital when needed, on acceptable terms, or at all, and any capital we raise could be highly dilutive.
Additionally, financings may be dilutive to our stockholders. For instance, the exercise of our Common Warrants or conversion of our Convertible Notes that are currently outstanding would result in significant dilution. To the extent we raise additional capital through the issuance of equity or convertible debt securities in the future, there will be further dilution to investors, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. We may not be able to raise funds on terms that are favorable to us, if at all. If we raise capital through debt financing, we may be subject to restrictive covenants that limit our ability to conduct our business. Our ability to raise additional funds when needed and on acceptable terms will depend on financial, economic and market conditions and other factors, over which we may have no or limited control. See, for example, “-Changes in global economic and financial markets may have a negative effect on our business” in “Part I, Item 1A. Risk Factors” of our Annual Report.
If we enter into capital-raising arrangements with related parties, the interests of our related parties may differ from those of other stockholders. For instance, as of September 30, 2026, $2,090,000 of the $5,090,000 principal amount of our Convertible Notes was held by family members and family trusts related to Mark Emalfarb, our President and Chief Executive Officer and a member of our Board of Directors. The Convertible Notes are secured and mature on December 31, 2027. These noteholders may have interests that differ from those of our other stockholders, including with respect to any modification, exchange, extension or repayment of the Convertible Notes, and decisions relating to the Convertible Notes may present conflicts of interest.
If we fail to raise sufficient funds and incur losses, our ability to fund our operations, take advantage of strategic opportunities, develop products or technologies, or otherwise respond to competitive pressures could be significantly limited. If this happens, we may be forced to delay or terminate research or development programs or the commercialization of products resulting from our technologies, curtail or cease operations or obtain funds through collaborative and licensing arrangements that may require us to relinquish commercial rights, sell certain assets of the company which will limit future opportunities, or grant licenses on terms that are not favorable to us. Without sufficient funding or revenue, we may have to curtail, cease, or dispose of one or more of our operations, which would have a material adverse effect on our business, financial condition, and future prospects.
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We have concluded that there is substantial doubt as to our ability to continue as a going concern.
As discussed in Note 1 to the Consolidated Financial Statements and “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of September 30, 2026, our management has concluded that there is substantial doubt about our ability to continue as a going concern. For more information regarding our management’s evaluation and mitigation plan, see Note 1 to the Consolidated Financial Statements. This mitigation could carry risks. Any capital raise could be highly dilutive to existing investors, we may not be able to raise funds on terms that are favorable to us, and there is no assurance we will remain listed on Nasdaq and maintain the access to liquidity needed to carry out a raise. While the Company has historically received significant grant funding, there is no guarantee its grant applications will be approved. There is also no assurance that Noteholders will agree to modify, exchange, or extend the maturity of their Convertible Notes. If we are unable to implement sufficient mitigation efforts, we may be forced to limit our business activities or be unable to continue as a going concern, which would have a material adverse effect on our results of operations and financial condition. If we become insolvent, investors in our securities may lose the entire value of their investment in our business.
If we fail to comply with listing standards of Nasdaq, our common stock may be delisted, adversely affecting the liquidity and market price of our common stock, as well as our ability to obtain sufficient additional capital to continue funding our operations.
Our common stock is currently listed on the Nasdaq Capital Market, which has minimum requirements that a company must meet to remain listed. As previously disclosed, we were previously not in compliance with various of these requirements, including the requirement that our common stock maintain a minimum bid price per share of $1.00 (such that the share price of the common stock close not below $1.00 for 30 consecutive business days) (the “Minimum Bid Price Rule”), and we did not meet any of the following conditions: $2.5 million in stockholders’ equity; $35 million in market value of listed securities; or $500,000 of net income from continuing operations (the “Continued Listing Standards”). On September 25, 2026, we received written notices from Nasdaq that we are again not in compliance with the Minimum Bid Price Rule and the $35 million market value of listed securities requirement, and we do not currently meet the $2.5 million stockholders’ equity requirement. We have until March 24, 2027 to regain compliance with the first two requirements. If we fail to regain or maintain compliance with the Minimum Bid Price Requirement, the Continued Listing Standards or any other requirement for continued listing on Nasdaq, our common stock could be delisted, subject to a possible appeal within Nasdaq. With respect to the Minimum Bid Price Rule, in May 2026, we received stockholder approval at our annual meeting for authorization for our Board to effect a reverse stock split on specific terms, and if we do not regain compliance with the rule, our Board may determine to effect the split as a possible way to cure the deficiency (to the extent deemed by the Board as in the best interests of us and our stockholders). In any event, if delisting of our common stock became final, it would then be traded in the over-the-counter market established for unlisted securities such as the OTCQX, the OTCQB, the OTCID Basic Market or the Pink Limited Market, but there can be no assurance that our common stock will be eligible for trading on any such alternative market. Additionally, the liquidity of our common stock would be adversely affected, the market price of our common stock could decrease, our ability to obtain sufficient additional capital to fund our operations and to continue to operate as a going concern would be substantially impaired and transactions in our common stock could lose federal preemption of state securities laws. Furthermore, there could be a reduction in our coverage by securities analysts, and broker-dealers may be deterred from making a market in or otherwise seeking or generating interest in our common stock, which could cause the price of our common stock to decline further. Moreover, delisting may also negatively affect our collaborators’, vendors’, suppliers’ and employees’ confidence in us and employee morale. If we effected a reverse stock split, the liquidity of our common stock could be harmed, given the reduced number of shares of common stock that would be outstanding afterward, particularly if the share price does not increase as a result thereof.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
| (a) | Not applicable. | |
| (b) | Other than the issuance of the Common Warrants reported on the Company’s Current Report on Form 8-K filed with the SEC on August 14, 2026, there were no unregistered sales of equity securities during the period covered by this Quarterly Report. | |
| (c) | On August 14, 2026, concurrently with the registered direct offering described in Note 7 to the Consolidated Financial Statements, the Company issued and sold to an institutional investor, in a private placement, Common Warrants to purchase an aggregate of 3,625,000 shares of common stock at a purchase price of $0.005 per Common Warrant, for aggregate gross proceeds of $18,125. The Common Warrants have an exercise price of $0.84 per share and expire on September 18, 2031, five years after the Release Date (September 18, 2026, the effective date of the resale registration statement on Form S-1). The Common Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. The purchaser was an accredited investor. The Common Warrants were sold concurrently with the shares in the registered direct offering, and no warrants were issued to the placement agent. |
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) None.
(b) None.
(c)
For the quarter ended September 30, 2026, none of our directors or officers (as defined in Section 16 of the Exchange Act)
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Item 6. Exhibits
The following Exhibits are filed as part of this report pursuant to Item 601 of Regulation S-K:
| Incorporated by Reference | ||||||||||
Exhibit No. |
Description of Exhibit | Form | Original No. | Date Filed | Filed Herewith | |||||
| 3.1 | Restated Certificate of Incorporation dated November 1, 2004 | 10-12G | 3.1 | January 14, 2019 | ||||||
| 3.2 | Fourth Amended and Restated Bylaws of Dyadic International, Inc., effective May 29, 2025 | 8-K | 3.1 | June 2, 2025 | ||||||
| 4.1 | Form of Common Warrant | 8-K | 4.1 | August 14, 2026 | ||||||
| 10.1 | Form of Common Stock Purchase Agreement (2) | 8-K | 10.1 | August 14, 2026 | ||||||
| 10.2 | Form of Warrant Securities Purchase Agreement (2) | 8-K | 10.2 | August 14, 2026 | ||||||
| 10.3 | Form of Registration Rights Agreement | 8-K | 10.3 | August 14, 2026 | ||||||
| 10.4 | Placement Agent Agreement, dated August 13, 2026, by and between Dyadic International, Inc. and Aegis Capital Corp. | 8-K | 10.4 | August 14, 2026 | ||||||
| 31.1 | Certification of Principal Executive Officer of Dyadic Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
| 31.2 | Certification of Principal Financial Officer of Dyadic Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
| 32.1 | Certification of Principal Executive Officer of Dyadic Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) | |||||||||
| 32.2 | Certification of Principal Financial Officer of Dyadic Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) | |||||||||
| 101.INS | Inline XBRL Instance Document | X | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | X | ||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) | X | ||||||||
(1) Furnished herewith.
(2) Certain schedules and other similar attachments to such agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| November 13, 2026 | DYADIC INTERNATIONAL, INC. | |
| By: | /s/ Mark A. Emalfarb | |
| Mark A. Emalfarb | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| November 13, 2026 | By: | /s/ Ping W. Rawson |
| Ping W. Rawson | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
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