Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global
biotechnology company focused on further improving and leveraging
the patented and proprietary C1 expression system to help speed up
the development and production of biologic vaccines and drugs at
flexible commercial scales, today announced its financial results
for the quarter ended September 30, 2016.
BUSINESS HIGHLIGHTS AND RECENT DEVELOPMENTS
- Executed a multi-year agreement with a new contract research
organization to further advance C1 expression system for
biopharmaceutical development and production
- Special shareholder meeting to be held on Wednesday, December
7, 2016 to seek shareholders' approval for a reverse stock
split
- Professional liability litigation trial date remains on track
for January 6, 2017
- Cash, cash equivalents and investment grade securities at
September 30, 2016 was $55.9 million, excluding escrowed funds
from the sale of the Company's industrial business to DuPont on
December 31, 2015 of approximately $7.4 million which is expected
to be received on July 1, 2017
- Net loss for the third quarter 2016 was approximately $1.2
million with EPS of $(0.03)
- Repurchased approximately 2.5 million shares of common stock at
an average $1.50 per share during the third quarter
FINANCIAL RESULTS QUARTER AND NINE MONTHS ENDED
SEPTEMBER 30, 2016
At September 30, 2016, cash and cash
equivalents were approximately $5.8 million compared to $68.6
million at December 31, 2015. The carrying value of investment
grade securities, including accrued interest as of September 30,
2016 was $50.1 million compared to $0 at December 31, 2015.
Cash and cash equivalents do not include the
$7.4 million of cash held in escrow in connection with the DuPont
Transaction, which we anticipate will be released on July 1, 2017.
Although none are anticipated, such amount is subject to reduction
should there be any claims from DuPont.
Cash used in the nine months ended
September 30, 2016 of approximately $62.8 million primarily
reflects stock repurchases net of stock issuances of approximately
$9.5 million, purchase of investment grade securities at face
value, net of repayments and maturities of approximately $48.7
million, and cash used in operating activities of approximately
$4.6 million which includes cash used in operations of
approximately $3.6 million, payment of DuPont Transaction related
liabilities of approximately $2.0 million, and premiums and
interest paid for investment grade securities of approximately $1.1
million, offset by cash received from the litigation settlement of
approximately $2.1 million.
The Company repurchased approximately 2.5
million shares of its common stock at an average of $1.50 per share
during the third quarter, and an aggregate of approximately 6.5
million shares of its common stock in both open market and private
transactions at an average price of $1.49 per share for the nine
months ended September 30, 2016. Subsequent to
September 30, 2016, the Company repurchased approximately 1
million additional shares at an average price of $1.64 per share
through November 10, 2016.
Net loss from continuing operations for the
quarter ended September 30, 2016 was approximately $1.2
million, or $(0.03) per basic and diluted share, compared to a net
income of $1.4 million, or $0.04 per basic and diluted share, for
the same period a year ago.
Net loss from continuing operations for the nine
months ended September 30, 2016 was approximately $1.6
million, or $(0.04) per basic and diluted share, compared to a net
loss of $1.0 million, or $(0.02) per basic and diluted share, for
the same period a year ago.
Research and development revenue for the nine
months ended September 30, 2016 decreased 64% to approximately
$101,800 compared to $285,700 for the same period a year ago. The
decrease in research and development revenue was due to the
Company’s termination of the R&D agreement with Sanofi Pasteur
S.A. in August 2016.
General and administrative expenses for the nine
months ended September 30, 2016 decreased 9% to approximately
$2,923,100 compared to $3,217,800 for the same period a year ago.
The decrease primarily reflects lower employee related costs due to
the organizational downsizing in connection with the DuPont
Transaction of $721,000, cost reimbursement received from DuPont
for services rendered in the transition services agreement of
$195,600, litigation and professional service costs of
$97,400, and bad debt expense of $66,000, partially offset by an
increase in cost related to new employment agreements for
executives of $309,700, non-cash stock compensation in connection
with the Special Committee of the Board and board compensation of
$239,300, as well as increase in the biopharmaceutical business
development costs of $138,300 and finance department compensation
costs of $106,900.
Research and development expenses from
continuing operations for the three and nine months ended
September 30, 2016 was approximately $369,400 and $963,700,
respectively. The spending reflects an R&D agreement with
DuPont, the initiation of our multi-year new research and
development agreement entered into on September 15, 2016 and
employee related costs to support our ongoing biopharmaceutical and
internally funded projects, and other governmental and commercial
projects.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call
today, Thursday November 10, 2016 at 5:00 p.m. to discuss the
financial results for the third quarter of 2016. In order to
participate in the conference call, please dial 877-795-3648 for
U.S./Canada callers and +719-325-4748 for International callers,
using access code 5036677.
A replay of the conference call will be
available on Dyadic’s website (www.dyadic.com) within 24 hours
after the live event.
About Dyadic International,
Inc.
Dyadic International, Inc. is a global
biotechnology company which is developing what it believes will be
a potentially significant biopharmaceutical protein production
system based on the fungus Myceliopthora thermophila, nicknamed C1.
The C1 microorganism, which enables the development and large scale
manufacture of low cost proteins, has the potential to be further
developed into a safe and efficient expression system that may help
speed up the development, production and performance of biologic
vaccines and drugs at flexible commercial scales. Dyadic is
using the C1 technology and other technologies to conduct research,
development and commercial activities for the development and
manufacturing of human and animal vaccines, monoclonal antibodies,
biosimilars and/or biobetters, and other therapeutic proteins.
Dyadic pursues research and development collaborations, licensing
arrangements and other commercial opportunities with its partners
and collaborators to leverage the value and benefits of these
technologies in developing and manufacturing biopharmaceuticals
which these technologies help produce. In particular, as the aging
population grows in developed and undeveloped countries, Dyadic
believes the C1 technology may help bring biologic drugs to market
faster, in greater volumes, at lower cost, and with new properties
to drug developers and manufacturers and, hopefully, improve access
and cost to patients and the healthcare system, but most
importantly saving lives.
Please visit Dyadic’s website at
www.dyadic.com for additional information, including details
regarding Dyadic’s plans for its biopharmaceutical business.
Dyadic trades on the OTCQX tier of the OTC
marketplace. Investors can find real-time quotes, market
information and financial reports for Dyadic, as well as additional
information related to its professional liability lawsuit, in the
company’s annual and quarterly reports which are filed with the OTC
markets. Please visit the OTC markets website at
www.otcmarkets.com/stock/DYAI/quote.
Safe Harbor Regarding Forward-Looking
Statements
Certain statements contained in this press
release are forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements involve
risks, uncertainties and other factors that could cause Dyadic’s
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Investors
are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. Any forward-looking
statements speak only as of the date of this press release and,
except as required by law, Dyadic expressly disclaims any intent or
obligation to update or revise any forward-looking statements to
reflect actual results, any changes in expectations or any change
in events. Factors that could cause results to differ materially
include, but are not limited to: (1) general economic, political
and market conditions; (2) our ability to carry out and implement
our biopharmaceutical research and business plans and strategic
initiatives; (3) Dyadic’s ability to retain and attract employees,
consultants, directors and advisors; (4) our ability to implement
and successfully carry out Dyadic’s and third parties research and
development efforts; (5) our ability to obtain new license and
research agreements; (6) our ability to maintain our existing
access to, and/or expand access to third party contract research
organizations in order to carry out our research projects for
ourselves and third parties; (7) competitive pressures and reliance
on key customers and collaborators; (8) the outcome of the current
litigation by Dyadic against its former counsel and; (9) other
factors discussed in Dyadic’s publicly available filings, including
information set forth under the caption “Risk Factors” in our
September 30, 2016 Quarterly Report filed with the OTC Markets on
November 10, 2016 and our December 31, 2015 Annual Report filed
with OTC Markets on March 29, 2016. New risks and uncertainties
arise from time to time, and it is impossible for us to predict
these events or how they may affect us.
Important Information about the Reverse
Stock Split Proposal
This communication may be deemed to be
solicitation material in connection with the proposal to be
submitted to Dyadic's shareholders at its special meeting
seeking approval to authorize a reverse stock split (the "Reverse
Stock Split Proposal").
A notice of the special meeting and a proxy
statement to solicit the votes of Dyadic stockholders to approve
the Reverse Split Proposal (the “Proxy Statement”) was posted to
Dyadic’s website (www.dyadic.com) and the OTC Marketplace Portal
(http://www.otcmarkets.com/stock/DYAI/filings) on October 26, 2016
and subsequently mailed to Dyadic stockholders. Shareholders
of Dyadic are urged to read the proxy statement and all
other relevant documents filed with the OTC Markets, because
they may contain important information about the Reverse Stock
Split Proposal and Dyadic.
Dyadic and its Board of Directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the holders of Dyadic common
stock in respect of the Reverse Stock Split Proposal. Information
about the directors and executive officers of Dyadic is
set forth in Dyadic's proxy statement for its 2016 annual
meeting of shareholders, which was filed with the OTC
Markets on March 29, 2016. Investors may obtain
additional information regarding the interest
of Dyadic and its directors and executive officers in the
Reverse Stock Split Proposal by reading the proxy statement
relating to the special meeting.
|
DYADIC INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
REVENUES: |
|
|
|
|
|
|
|
Research
and Development Revenue |
$ |
— |
|
|
$ |
213,485 |
|
|
$ |
101,836 |
|
|
$ |
285,721 |
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES
(INCOME): |
|
|
|
|
|
|
|
Costs of
Goods Sold |
— |
|
|
34,993 |
|
|
98,822 |
|
|
92,145 |
|
General
and Administrative |
939,195 |
|
|
1,000,641 |
|
|
2,923,127 |
|
|
3,217,837 |
|
Research
and Development |
369,359 |
|
|
— |
|
|
963,673 |
|
|
— |
|
Foreign
Currency Transaction (Gain) Loss, Net |
(46,897 |
) |
|
(23,136 |
) |
|
(78,568 |
) |
|
105,521 |
|
Total
Expenses |
1,261,657 |
|
|
1,012,498 |
|
|
3,907,054 |
|
|
3,415,503 |
|
|
|
|
|
|
|
|
|
LOSS FROM CONTINUING
OPERATIONS BEFORE OTHER INCOME (EXPENSE) |
(1,261,657 |
) |
|
(799,013 |
) |
|
(3,805,218 |
) |
|
(3,129,782 |
) |
|
|
|
|
|
|
|
|
Other
Income (Expense): |
|
|
|
|
|
|
|
Settlement of Litigation, Net |
— |
|
|
2,170,000 |
|
|
2,100,000 |
|
|
2,170,000 |
|
Interest
Income |
146,930 |
|
|
2,638 |
|
|
344,012 |
|
|
8,725 |
|
Interest
Expense |
— |
|
|
— |
|
|
(909 |
) |
|
— |
|
Total
Other Income |
146,930 |
|
|
2,172,638 |
|
|
2,443,103 |
|
|
2,178,725 |
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES |
(1,114,727 |
) |
|
1,373,625 |
|
|
(1,362,115 |
) |
|
(951,057 |
) |
|
|
|
|
|
|
|
|
Income
Tax Expense from Continuing Operations |
(50,694 |
) |
|
— |
|
|
(184,439 |
) |
|
— |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS |
(1,165,421 |
) |
|
1,373,625 |
|
|
(1,546,554 |
) |
|
(951,057 |
) |
|
|
|
|
|
|
|
|
NET INCOME FROM
DISCONTINUED OPERATIONS, NET OF TAXES |
— |
|
|
536,601 |
|
|
— |
|
|
2,057,410 |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
$ |
(1,165,421 |
) |
|
$ |
1,910,226 |
|
|
$ |
(1,546,554 |
) |
|
$ |
1,106,353 |
|
|
|
|
|
|
|
|
|
BASIC NET INCOME (LOSS)
PER SHARE: |
|
|
|
|
|
|
|
Basic Net
Income (Loss) from Continuing Operations per Share |
$ |
(0.03 |
) |
|
$ |
0.04 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.02 |
) |
Basic Net
Income from Discontinued Operations per Share |
— |
|
|
0.02 |
|
|
— |
|
|
0.05 |
|
Basic Net
Income (Loss) per Share |
$ |
(0.03 |
) |
|
$ |
0.06 |
|
|
$ |
(0.04 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
DILUTED NET INCOME
(LOSS) PER SHARE: |
|
|
|
|
|
|
|
Diluted
Net Income (Loss) from Continuing Operations per Share |
$ |
(0.03 |
) |
|
$ |
0.04 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.02 |
) |
Diluted
Net Income from Discontinued Operations per Share |
— |
|
|
0.02 |
|
|
— |
|
|
0.05 |
|
Diluted
Net Income (Loss) per Share |
$ |
(0.03 |
) |
|
$ |
0.06 |
|
|
$ |
(0.04 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
Weighted-Average Number
of Shares: |
|
|
|
|
|
|
|
Basic |
36,185,164 |
|
34,247,456 |
|
37,514,315 |
|
34,219,493 |
Diluted |
36,185,164 |
|
34,418,151 |
|
37,514,315 |
|
34,410,770 |
Balance Sheet
Information: |
September 30, 2016 |
|
December 31, 2015* |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
Cash and
Cash Equivalents |
$ |
5,827,998 |
|
|
$ |
68,601,138 |
|
Investment Securities, Short-term and Long-term |
50,074,381 |
|
|
— |
|
Escrowed
Funds from Sale of Assets |
7,363,977 |
|
|
7,361,182 |
|
Total
Assets |
63,850,085 |
|
|
76,667,425 |
|
|
|
|
|
|
|
Accumulated Deficit |
(20,259,650 |
) |
|
(18,713,096 |
) |
Stockholders' Equity |
63,254,078 |
|
|
73,794,505 |
|
|
|
|
|
*Condensed from audited
financial statements |
|
|
|
|
|
|
|
INCOME FROM DISCONTINUED OPERATIONS
(Unaudited) |
|
|
Three Months Ended September 30,
2015 |
|
Nine Months Ended September 30,
2015 |
REVENUES: |
|
|
|
Product
Related Revenue, Net |
$ |
3,272,497 |
|
|
$ |
9,507,207 |
|
License
Fee Revenue |
567 |
|
|
800,567 |
|
Research
and Development Revenue |
471,322 |
|
|
1,230,233 |
|
Total
Revenue |
3,744,386 |
|
|
11,538,007 |
|
COSTS AND EXPENSES
(INCOME): |
|
|
|
Cost of
Goods Sold |
2,264,790 |
|
|
6,856,869 |
|
General
and Administrative |
82,733 |
|
|
(21,472 |
) |
Sales and
Marketing |
139,263 |
|
|
681,727 |
|
Research
and Development |
453,208 |
|
|
1,261,783 |
|
Foreign
Currency Transaction Loss, Net |
14,475 |
|
|
49,233 |
|
Total
Expenses |
2,954,469 |
|
|
8,828,140 |
|
|
|
|
|
INCOME FROM
DISCONTINUED OPERATIONS BEFORE OTHER EXPENSE |
789,917 |
|
|
2,709,867 |
|
|
|
|
|
OTHER EXPENSE: |
|
|
|
Interest
Expense |
(221,116 |
) |
|
(620,257 |
) |
NET INCOME FROM
DISCONTINUED OPERATIONS BEFORE INCOME TAXES |
568,801 |
|
|
2,089,610 |
|
Provision
for Income Taxes |
(32,200 |
) |
|
(32,200 |
) |
NET INCOME FROM
DISCONTINUED OPERATIONS |
$ |
536,601 |
|
|
$ |
2,057,410 |
|
Contact:
Dyadic International, Inc.
Thomas L. Dubinski
Chief Financial Officer
Phone: 561-743-8333
Email: tdubinski@dyadic.com
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