UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
| For the fiscal year ended December 31, 2023 |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the transition period from _____ to ______ |
Commission file number:000-55264
** **DYADIC INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 45-0486747 |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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**1044 North U.S. Highway One, Suite 201 **
Jupiter, Florida 33477
(Address of principal executive offices) (Zip Code)
(561)743-8333
(Registrant’s telephone number, including area code)** **
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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| Common Stock, par value $0.001 per share | DYAI | The NASDAQ Stock Market LLC |
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Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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 ☐ |
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| Non-accelerated filer ☒ | Smaller reporting company ☒ |
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| 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. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes☐ No ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affil iates of the registrant (20,274,721 shares) computed by reference to the closing price of $1.93 as reported on the NASDAQ Stock Market on June 30, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $39.1 million. Shares of the registrant’s common stock held by executive officers, directors, and other affiliates have been excluded from this calculation. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of March 27, 2024, the registrant had 28,974,105 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this Report, to the extent not set forth herein, is incorporated in this Report by reference to the Registrant’s definitive proxy statement relating to the 2024 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2023 fiscal year.
| TABLE OF CONTENTS |
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| Page |
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| PART I | 5 | |
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| Item 1. | Business | 5 |
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| Item 1A. | Risk Factors | 11 |
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| Item 1B. | Unresolved Staff Comments | 24 |
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| Item 1C. | Cybersecurity | 24 |
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| Item 2. | Properties | 25 |
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| Item 3. | Legal Proceedings | 25 |
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| Item 4. | Mine Safety Disclosures | 25 |
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| PART II | 26 | |
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| Item 5. | Market for Registrant’s Common Equity, and Related Stockholder Matters and Issuer Purchases of Equity Securities | 26 |
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| Item 6. | Selected Financial Data | 26 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
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| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 31 |
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| Item 8. | Financial Statements and Supplementary Data | 32 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 32 |
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| Item 9A. | Controls and Procedures | 32 |
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| Item 9B. | Other Information | 33 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 33 |
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| PART III | 33 | |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 33 |
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| Item 11. | Executive Compensation | 33 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 33 |
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| Item 13. | Certain Relationship and Related Transactions, and Director Independence | 33 |
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| Item 14. | Principal Accountant Fees and Services | 33 |
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| PART IV | 34 | |
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| Item 15. | Exhibits and Financial Statement Schedules | 34 |
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| SIGNATURES | 36 | |
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| INDEX TO FINANCIAL STATEMENTS | F-1 | |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
Information (other than historical facts) set forth in this Annual Report on Form 10-K (the “Annual Report” or the “Form 10-K”) contains forward-looking statements within the meaning of the Federal securities laws, which involve many risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. 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. Such forward-looking statements are included under Item 7 “Management’s Discussion and Analysis”. Dyadic International, Inc., and its subsidiaries cautions 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, the items in the following list, which also summarizes some of our more principal risks:
Risks Related to Our Business and Financial Condition
| o | We may not succeed in implementing our business strategy. |
| o | We have a history of net losses, and we may not achieve or maintain profitability. |
| o | We could fail to manage our growth. |
| o | Our revenue growth depends in part on market and regulatory acceptance of our microbial protein production platforms and other technologies to develop and manufacture animal and/or human biopharmaceutical products and non-pharmaceutical products. |
| o | We may fail to commercialize our microbial protein production platforms or our other technologies for the expression of therapeutic proteins, antibodies, vaccines, and metabolites or other non-pharmaceutical biologic products. |
| o | If our competitors develop technologies and products more quickly and market more effectively than our product candidates, our commercial opportunity will be reduced or eliminated. |
| o | Alternative technologies may not require microbial or other cell produced proteins, such as our proprietary C1 cells and Dapibus™. |
| o | Our SARS-CoV-2 vaccine candidates are at the clinical stage and have not been approved for sale. We have not developed, manufactured or commercialized any vaccine product in the past, and we may be unable to produce a vaccine that can be used to successfully prevent the SARS-CoV-2 virus or its variants of concern, in a timely and economical manner, if at all. |
| o | The results of nonclinical studies and early-stage clinical trials may not be predictive of future results. |
| o | We may need substantial additional capital in the future to fund our business. |
| o | Changes in global economic and financial markets may have a negative effect on our business. |
| o | We face risks related to widespread outbreaks of contagious disease or other biological threats, any of which could significantly disrupt our operations and have a material adverse effect on our business, employees, directors, consultants, collaborators and other third parties, including business development activities and research and development projects conducted by third party contract research organizations parties. |
| o | Our sales and operations are subject to the risks of doing business internationally. |
| o | If we lose key personnel, including key management or board members, or are unable to attract and retain additional personnel, it could delay our technology and product development programs and harm our R&D efforts, and we may be unable to pursue research funding, licenses and other forms of collaborations or develop our own products. |
| o | We may be sued for product liability. |
| o | Foreign currency fluctuations could adversely affect our results. |
| o | Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations. |
| o | We may make acquisitions, investments and strategic alliances that may use significant resources, result in disruptions to our business or distractions of our management, may not proceed as planned, and could expose us to unforeseen liabilities. |
| o | We rely significantly on information technology, including artificial intelligence and machine learning, and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively. |
| o | Information technology system failures, network disruptions or cyber security breaches could adversely affect our business. |
| o | Changes to our outsourced software or infrastructure vendors as well as any sudden loss, breach of security, disruption or unexpected data or vendor loss associated with our information technology systems could have a material adverse effect on our business. |
Risks Related to Dependence on Third Parties
| o | We are dependent on collaborations with third parties, and if we fail to maintain or successfully manage existing, or enter into new, strategic collaborations, we may not be able to develop and commercialize many of our technologies and products and achieve profitability. |
| o | We have limited or no control over the resources that any collaborator or licensee may devote to our programs, and reductions in collaborators’ R&D budgets may affect our businesses. |
| o | We heavily rely on contracts with third-party contract research organizations (“CROs”) and other third-party service providers to conduct our research and development, pre-clinical, CMC and cGMP manufacturing, fill and finish, and potential clinical trials, which may not be available to the Company on commercially reasonable terms or at all. |
| o | Conflicts with the CROs, other service providers, collaborators and/or licensees could harm our business. |
| o | We rely on our collaborators and other third parties to deliver timely and accurate information in order to accurately report our financial results as required by law. |
| o | Changes to our outsourced software or infrastructure vendors as well as any sudden loss, breach of security, disruption or unexpected data or vendor loss associated with our information technology systems could have a material adverse effect on our business. |
Risks Related to Government Regulations and Environmental, Social, and Governance Issues
| o | Potential future regulations limiting our ability to sell genetically engineered products could harm our business. |
| o | Public views on ethical and social issues may limit use of our technologies. |
| o | Our results of operations may be adversely affected by environmental, health and safety laws, regulations and liabilities. |
| o | Increasing scrutiny and changing expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. |
| o | We have no experience submitting applications to the FDA or similar regulatory authorities in the past and could be subject to lengthy and/or unfavorable regulatory proceedings. |
Risks Relating to Intellectual Property
| o | Failure to protect our intellectual property and the intellectual property of certain third parties could harm our competitive position. |
| o | Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and resources and could prevent us and our collaborators from commercializing our or their technologies and products or negatively impact our stock price. |
| o | Confidentiality agreements with employees and others may not adequately prevent disclosures of trade secrets and other proprietary information. |
Risks Related to Our Common Stock
| o | The price of our shares of common stock is likely to be volatile, and you could lose all or part of your investment. |
| o | Our quarterly and annual operating results may be volatile. |
| o | We do not expect to pay cash dividends in the future. |
| o | Our anti-takeover defense provisions may deter potential acquirers and depress our stock price. |
| o | Concentration of ownership among our existing officers, directors and principal stockholders may prevent other stockholders from influencing significant corporate decisions and depress our stock price. |
| o | Future issuances of shares of our common stock may negatively affect our stock price. |
| o | The Company is exposed to credit risk and fluctuations in the values of its investment portfolio. |
| o | We are a smaller reporting company, and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. |
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. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. New risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Before investing in our common stock, investors should carefully read the information set forth under the caption “Risk Factors” and elsewhere in this Annual Report which could have a material adverse effect on our business, results of operations and financial condition.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this Annual Report to conform these statements to actual results or to changes in our expectations.
We qualify all our forward-looking statements by these cautionary statements. In addition, with respect to all our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
